NEW YORK: Wall Street stocks tumbled on Wednesday (Nov 9), with the Dow dropping nearly 650 points, as markets digested US election results and monitored upheaval in the cryptocurrency market.
After three straight positive sessions, stocks were in the red the whole session after US midterm elections.
Analysts said divided control of Washington – a scenario generally favorable to stocks – still appeared likely, even though Republican gains were smaller than expected.
“What was really more expected in the market was a red wave,” said Jay Hatfield, CEO of Infrastructure Capital Management in New York. “I think we were in a unique situation where the more the Republicans won, the better off the market would have been. At least there would have been some stocks strongly rallying, like defence and energy stocks.”
The declines in equities came amid anxiety ahead of today’s (Nov 10) pivotal consumer price report and as a big drop in bitcoin and other digital currencies raised worries about margin calls.
“What’s going on in crypto markets is leaking out into equity markets,” said Art Hogan, analyst at B. Riley Financial.
The Dow Jones Industrial Average lost 1.95% to finish at 32,513.94.
The broad-based S&P 500 fell 2.08% to 3,748.57, while the tech-rich Nasdaq Composite Index slid 2.48% to 10,353.18.
Wednesday's drop on Wall Street ended a three-day rally in which the S&P 500 had gained almost 3%.
Among individual companies, Disney plunged 13.2% after reporting weaker-than-expected results as losses at the company’s streaming services more than doubled the quarterly operating loss to US$1.5 billion.
The results also weighed on other media stocks, including Paramount, which sank 6.3% and Fox, which dropped 3.5%.
Facebook-parent Meta jumped 5.2% as it announced it will lay off more than 11,000 of its staff as ad-supported tech firms like Facebook and Google face macroeconomic headwinds. – AFP, Reuters