Dow Jones suffers worst day in six years sparking global stock market sell-off

The Dow Jones Industrial Average suffered its worst fall in over six years on Monday
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Tom Powell6 February 2018

The White House has attempted to reassure investors after US stocks suffered their worst drops in more than six years.

The Dow Jones industrial average index plunged more than 1100 points to close at 24,345.75.

Shares tumbled in Asia on Tuesday morning following the wild day in the US market.

But the White House said in a statement it was focused on "long-term economic fundamentals, which remain exceptionally strong".

A TV screen on the floor of the New York Stock Exchange
AP

Two days of steep losses have erased the US market's gains from the start of this year and ended a period of record-setting calm for stocks. Banks fared the worst as bond yields and interest rates nosedived.

Health care, technology and industrial companies all took outsize losses and energy companies sank with oil prices.

"It's like a kid at a child's party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge," said David Kelly, the chief global strategist for JPMorgan Asset Management.

He said the signs of inflation and rising rates are not as bad as they looked, but after the market's big gains in 2017 and early 2018, stocks were overdue for a drop.

The drop sparked a global stock market sell-off
AP

The Standard & Poor's 500 index, the benchmark most professional investors and many index funds use, skidded 113.19 points, or 4.1 per cent, to 2648.94.

That was its biggest loss since August 2011, when investors were fearful about European government debt and the US came close to breaching its debt ceiling.

The Nasdaq composite fell 273.42 points, or 3.8 per cent, to 6967.53.

The Russell 2000 index of smaller-company stocks sank 56.18 points, or 3.6 per cent, to 1491.09.

In London, the FTSE 100 index of leading companies also fell by 1.46 per cent or 108 points.

The slump began on Friday as investors worried that creeping signs of higher inflation and interest rates could derail the US economy along with the market's record-setting rally.

Energy companies, banks, and industrial firms are taking some of the worst losses.

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