By Victor Reklaitis and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market plunged in early
trade on Wednesday as investors unloaded risky assets and piled
into havens such as Treasurys and gold.
The main benchmarks fell more than 2% shortly after the open,
while the U.S. 10-year Treasury note yield dived 35 basis points,
breaching the 2% level.
Disappointing economic reports ahead of the bell added to
already jittery sentiment on Wall Street. Reports on manufacturing
in the state of New York and U.S. wholesale prices missed
expectations, and a reading on retail sales showed a decline for
the first time in eight months.
The S&P 500 (SPX) fell 31 points, or 1.7%, to 1,850 and is
down more than 8.5% from its peak reached on September 18. The Dow
Jones Industrial Average (DJI) dropped 295 points, or 1.9%, to
16,041.76. The Nasdaq Composite (RIXF) plunged 80 points, or 1.9%,
to 4,146.11.
Sean Darby, chief global equity strategist at Jefferies, said
it's unlikely the U.S. stock market has entered a bear-market
phase, but rather investors are just unwinding "unfettered
confidence" in central-bank policy.
"The equity market will bottom out once commodity prices find a
floor and the fear of deflation recedes," he said in a note dated
Tuesday. Crude-oil prices (CLZ4) fell anew on Wednesday, dropping
1% ahead of key supply data. Prices hit a two-year low on Tuesday
after a cut in the outlook for oil-demand growth from the
International Energy Agency. Energy-related stocks have fallen in
the last four sessions.
Read: These 5 charts explain when to call a bottom in the
S&P's slide
Today's market-moving news: Among the big companies reporting
earnings ahead of the bell, Bank of America (BAC) reported a
third-quarter loss that was smaller than expected.
In economic news, the Empire State manufacturing survey
retreated sharply to 6.2 in October. Economists polled by
MarketWatch had expected a 21.0 reading
Retail sales fell 0.3% in September, and a producer price index
dropped 0.1%, while economists surveyed by MarketWatch had
predicted a 0.1% increase.
The Federal Reserve's Beige Book is due at 2 p.m. Eastern, and
it's expected to paint a picture of an improving U.S. economy.
Stocks to Watch: AbbVie Inc. (ABBV) shares fell 4% after the
U.S. drug maker indicated it's reconsidering a $54 billion deal to
buy Shire PLC in light of new Treasury rules that make that deal
less attractive. Shares of Shire slumped 26% in London, weighing on
the FTSE 100, while its U.S.-listed shares (SHPGY) sank 23%.
Ireland to close 'Double Irish' tax loophole
Hazmat-suit related companies that have recently rallied on
Ebola fears were surging once again in premarket trading on
Wednesday. Shares of Lakeland Industries Inc. (LAKE) rallied 15%,
Alpha Pro Tech Ltd. (APT) jumped 21% and Versar Inc. (VSR) picked
up 36%.
Qualcomm Inc.(QCOM) said it has offered to buy U.K. chip maker
CSR PLC in a $2.5 billion deal. In August, CSR rejected a takeover
offer from Microchip Technology Inc. (MCHP). U.S-listed CSR shares
(CSRE) surged 31%. .
American Express (AXP), Netflix Inc. (NFLX) and eBay Inc. (EBAY)
will report after the close. Check out MarketWatch's for
previews.
Other markets: Asian stocks largely rebounded from Tuesday
losses. Gold prices (GCZ4) edged up.
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