S&P hits 16-month low as Wall St. slides

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The indexes, which have had their worst early December since 1980, are now down more than nine percent for the year.

The three major indexes swung between losses and gains of more than 1 percent as fragile investor nerves were tested by news of turmoil in Washington and soothing comments from an influential Federal Reserve official. The broader S&P 500 index continued its slump, too, and is down 10.6 percent this month alone, with six days of trading to go.

Stocks are opening lower on Wall Street a day after the market took a big plunge.

The S&P 500 fell 36 points, or 1.4 percent, to 2,471.

"Investors are looking for cover".

"It's the old saying, the generals finally got hit", said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

Dow Dives to Lowest Point in 2018 After Fed Rate Hike
Dow Dives to Lowest Point in 2018 After Fed Rate Hike

The dollar index rose 0.76 percent, with the euro down 0.74 percent to $1.1359. President Trump has threatened not to sign a Senate appropriations bill averting shutdown unless Congress agrees to $5 billion in extra funds for the US southern border wall. Those worries were compounded by the sudden resignation of U.S. Defense Secretary Jim Mattis. For the last three years the Fed told investors weeks in advance that it was nearly certain to increase rates. "We have more shake ups within the Trump administration", Loewengart said.

The initial tick upward came as Federal Reserve Bank of New York President John Williams said that the central bank could reassess its interest rate policy and balance sheet reduction in the new year if the economy slows. The Dow Jones Industrial Average dropped 500 points, bringing its losses since Friday to more than 1,800 points. The Nasdaq added 18 points, or 0.2 percent, to 6,543.

"Nasdaq is your more growth-oriented story, so the biggest stocks are driving the overall market because they're a bigger chunk of it", said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.

With December 21's losses, the Nasdaq has fallen almost 22 percent from its August 29 high. They are closing in on bear market territory, which is marked when an index closes more than 20 percent below its closing high.

Today's data from the United States showed that the real GDP in the third quarter expanded by 3.4% (third estimate) and durable goods orders rose 0.8% on a monthly basis in November following October's 4.3% contraction but fell short of the market expectation of 1.6%.

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