Dow tanks more than 300 points amid Fed, foreign concerns
Financial markets went into a tailspin Thursday as the Dow plunged more than 300 points after Argentina defaulted on its debt.
Stocks dropped steeply Thursday, exacerbating a two-day slump that analysts attributed to concerns about instability abroad, worries about Friday’s employment data and fears that the Federal Reserve may raise rock-bottom interest rates sooner than expected.
The Dow Jones industrial average tanked 317.06 points. The Standard & Poor’s 500 slumped 39 points, and the Nasdaq composite index swung down 93 points.
The blue-chip Dow closed in the red for July – its first monthly decline since January.
Strife in other countries – tensions between Russia and Ukraine, fighting in Gaza and ISIS militants’ advances in Iraq – contributed to a sell-off.
Argentina, which lost its appeals in U.S. courts over its sovereign debt, fell into default for the second time in 13 years after 11th-hour talks with bondholders failed to resolve the issues late Wednesday.
The foreign hostilities exacerbated concerns that a strengthening economy at home could compel the Fed to reverse its economic stimulus program before the June 2015 mark expected by Wall Street.
A smattering of disappointing earnings and downgraded forecasts at companies such as Exxon Mobil and Whole Foods Market also discouraged investors.
But Alan Whitman, a managing director with Morgan Stanley, said it’s “not a major run to get out.”
“Buyers are being very, very disciplined. They’re not chasing after things, just making sellers drop prices to come down to their level,” he said. “The volume is low; it isn’t like there’s a panic to get to the exits.”
Follow Tiffany Hsu on Twitter at @tiffhsulatimes
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