Red October: Growth Concerns Trigger Global Rout

By Glenn Dyer | More Articles by Glenn Dyer

It’s only been two days of the month and quarter so far but stock markets have wiped out their small gains for the three months to September and are now eating away at the big rises in June and the first half of the year as recession fears in the US mount.

Driving the sell down are fears about the health of the US, Chinese and European economies – especially the US where a survey of manufacturing activity fell to its lowest reading for a decade. Growing political instability in the US with pressure mounting on Donald Trump over the Ukraine affair and growing support for impeachment is also contributing to the market weakness.

Gold climbed back over $UD1,500 an ounce to end at $US1,506, up around $US17 an ounce heading into early dealings in Asia. In contrast, oil sold off and was trading around $US52.50 a barrel and heading towards the key $US50 a barrel mark.

The Dow fell 494.42 points, or 1.86%, to 26,078 while the S&P 500 index lost 52.64 points or 1.79% to 2,887.61. The Nasdaq fell 123.44 points, or 1.56%, to 7,785.25.

On Tuesday, the lost 344 points, or 1.3%, to finish 26,573.04, the S&P 500 fell 37 points, or 1.2%, to end at 2,940.25. The Nasdaq Composite Index lost 91 points, or 1.1%, to close at 7,908.68.

The Dow has now lost 3.1% in the first two days of October, the S&P 500 just on 3% and the Nasdaq is off 2.7%.

For the third quarter, the Dow and the S&P 500 both rose 1.2%, but the Nasdaq fell 0.1%. The ASX was up 1.1%.

The ASX’s modest quarterly rise for September was wiped out by the 1.5% fall on Wednesday which made the 55 point or 0.9% rise on Tuesday look silly.

The ASX faces a 2% slide on Thursday after overnight trading on the futures market saw a 121 point slump in the wake of the global sell down earlier in the day.

Now there’s a pool of red ink across Wall Street – stocks continued their slide Wednesday and posted the worst start to a quarter since 2008, with data showing slower job creation adding to concerns about a weakening manufacturing sector as President’s Trump’s trade policies take their toll.

Car manufacturers stocks fell after quarterly sales reports from Ford and General Motors added to concern over profit margins in the industry.

Marketwatch said all 11 S&P 500 sectors were down with industries sensitive to economic growth dropping most. The last time all 11 sectors fell for two straight days was December 24, 2018, which was the low for the market in the big sell down at the end of last year.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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