United States stocks close lower as government shutdown looms

Some economists argue that the steep Wall Street sell-off does not reflect conditions in the wider economy, which grew at an annual pace of 3.4% in the most recent quarter.

The Dow Jones Industrial Average fell 414 points, or 1.8 percent, 22,445. A bear market occurs when the index or stock falls 20 per cent or more from the peak.

Lipper data on Thursday showed investors pulled almost $34.6 billion out of stock funds in the latest week and were heading for the biggest month of net withdrawals on record. They allow markets to remove speculative froth after a big run-up and give investors a chance to buy stocks at lower prices. Additionally, the Dow closed at its lowest level since October 2017, while the S&P 500 ended the session at its lowest since September 2017.

Technology stocks fell Friday on continued negative sentiment about the US-China trade relationship, regulation and a general adversity to risk.

It's the first year since World War II that the S&P 500 has had two corrections in the same calendar year. For instance, the Nasdaq fell 55.6 percent during its last bear market, which ran from October 31, 2007, to March 9, 2009.

In addition to the Dow's 1.8 percent drop, the Nasdaq closed down 195 points for a 3 percent drop and the S&P 500 closed down 50 points for a 2.06 percent drop. The yield on the two-year Treasury rose to 2.87 percent from 2.65 percent, while the 10-year note rose to 2.80 percent from 2.77 percent.

In Nasdaq's record-long bull market, which ended with its all-time-high close on August 29, the index gained more than 539 percent from its post-financial-crisis low on March 9, 2009. Markets tend to move, however, on what investors try to anticipate will happen further out.

The S&P 500 fell 61 points, or 2.4 percent, to 2,445.

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US stocks sink after Fed rate hike, Dow swings over 700 points to close down 1.5%

The latest round of selling, which on Friday dragged the Nasdaq down almost 3 percent to its lowest closing level since August 2017, comes two days after the Federal Reserve raised interest rates for a fourth time this year, as the USA central bank continues to unwind the low interest-rate policy that supported stocks for almost a decade.

"There are lots of signs now suggesting that we may be looking at a recession", Komal Sri-Kumar, president of Sri-Kumar Global Strategies, told CNBC Friday.

The major USA stocks indexes accelerated declines in the last hour of trading after White House trade adviser Peter Navarro said the United States and China might not reach a trade deal at the close of a 90-day negotiating window unless Beijing can agree to a profound overhaul of its economic policies.

That works out to corrections becoming bear markets a little less than 40 per cent of the time.

The dollar index rose 0.76 percent, with the euro down 0.74 percent to $1.1359.

The S&P 500 index lost 14 points, or 0.6 percent, to 2,491.

The Nasdaq led Friday's plunge, dropping three percent for a total week's loss of 8.3 percent, breaking August's record low.

On average, bull markets last 4.5 years.


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