Published: Sat, October 27, 2018
Money | By Ethel Goodwin

Asia facing sharp falls after Wall Street wipes out 2018 gains

Asia facing sharp falls after Wall Street wipes out 2018 gains

Both the Dow Jones Industrial Average and S&P 500 Index erased their annual gains, even as the S&P 500 operating income is surging more than twice the historical average. The Nasdaq slid 131 points, or 1.8 percent, to 7,306. As markets opened on Thursday, the colour was red: China's Shanghai Composite Index lost as much as 2.8%, and Hong Kong's Hang Seng Index 2.4%.

The Dow tumbled 2.4 per cent to 24,583.42.

All the three major Wall Street indexes were trading below their 200-day moving averages, a key technical indicator of long-term momentum, and all 11 major S&P sectors were in the red, continuing what has been a punishing month for USA stocks.

Rakuten Securities Australia's chief operating officer Nick Twidale says the market has well and truly entered a correction stage but says the indices will get worse before they get better.

The Australian metals and mining index fell 3.5 per cent to a more than one-month closing low.

High-flying companies like Netflix and Amazon took some of the biggest losses Wednesday.

AT&T sank after reporting weak subscriber numbers, and chipmaker Texas Instruments fell 8.2 per cent after reporting slumping demand.

"Investor sentiment remains cautious as we anticipate the reports of over 100 S&P 500 companies including Amazon (AMZN.O), Alphabet (GOOGL.O) and Comcast (CMCSA.O)".

The S&P 500 index fell 84 points, or 3.1 per cent, to 2,656.

"The sentiment and the outlook seems to be turning more negative, or at the very least, less rosy".

Markets have been rattled in recent weeks by increased worries over the impact that rising interest rates, inflation and the escalating trade dispute between the USA and China may have on Corporate America. The Australian dollar was quoted at $0.7063, down from $0.7099 on Wednesday. Yields on Treasuries rose and the United States dollar strengthened to the highest level this year - the Australian dollar edged slightly higher.

The company, which came under intense scrutiny from the royal commission into the country's financial sector for wrongdoing earlier this year, also said it was contemplating an initial public offering for its New Zealand wealth management and advice businesses in 2019. 3M Co. plunged 6.8 percent after third-quarter profits missed expectations and the company cut its full-year earnings forecast.

AT&T was among the big decliners in the media and communications sector, dropping 8.1 per cent to Dollars 30.36 after the communication giant's latest quarterly results fell short of Wall Street's expectations.

Boeing jumped 2.2 per cent in early trading Wednesday after beating analysts' earnings forecasts and raising its estimates for the year, citing faster orders for aircraft.

Embattled wealth-manager AMP fell nearly 8 per cent in afternoon trade, before bouncing to close down 4.8 per cent. Brent crude, used to price global oils, dropped 4.1 percent to $76.52 per barrel in London.

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