Dow sinks 800 as tech companies decline

Why Howard Marks is cautioning investors

The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy.

Alec Young, managing director of global markets research at FTSE Russell, said investors fear that rising interest rates and growing expenses are going to erode company profits next year. Higher rates increase borrowing costs, pinching corporate profits.

All of these stocks have seen sharp gains on the year and yet investors have been quick to sell-off and take profits as they shift into more conservative securities like bonds and treasury notes.

US crude dropped 3 percent to $70.97 a barrel in NY.

Stephen Innes of OANDA said that Trump's comments have put pressure on the dollar but "the severity of this equity rout could bring the hawkish Fed narrative into question".

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Sentiment also has been dampened by the spreading U.S.

"It is a ideal storm for technology right now with the tariff war with China and weaker demand for chips", Nauman said.

Trump on Wednesday strongly criticized the Fed for tightening rates, again signaling that he wanted interest rates to remain low. Apple shares fell 1.2 percent. Heating oil shed 2.6 percent to $2.33 a gallon. Energy companies fell with oil prices, and even safer bets like utilities and real estate companies sank.

United States stocks tumbled for a second straight session on Thursday (Oct 11) as volatility reigned on Wall Street amid worries about higher interest rates and trade wars.

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The Dow Jones Industrial Average dropped 546 points, a 2.13 percent decline.

The drop in yields hurt banks, and JPMorgan Chase fell 3.3 percent to $107.77 while Bank of America sank 2.9 percent to $28.40. The Nasdaq Composite closed at 7,422.05 for a loss of -315.97 points or -4.08%. It's fallen 6.3 per cent over the last five days.

The recent turbulence in financial markets is a contrast to what investors have grown accustomed to in a bull market that has lasted more than 10 years, the longest in history.

Amazon has soared 50 percent this year, but its stock has fallen 14 percent from its all-time high in early September.

Markets in Europe came off their earlier losses after the inflation report.

The weakness in tech was led by semiconductor names after Swiss vacuum valve maker VAT Group said demand from chip equipment makers was softening.

The dollar fell to 111.98 yen from 112.59 yen, and the euro rose to $1.1593 from $1.1525.

Oil futures fell. US crude gave up $1.27 to $71.90 a barrel.

"There is more optimism that they will find some agreement between Britain and the European Union before Brexit", said Steve Englander, global head of G10 FX research at Standard Chartered Bank in NY.

The tech-heavy TWSE index in Taiwan plummeted 6.3 percent, while Japan's Nikkei slid almost 4 percent and the South Korean KOSPI index dropped 4.4 percent as foreign investors pulled out.

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