US stocks drop 2 per cent in another heavy sell-off, putting major markets in correction territory

  • Half the components of the S&P 500 – 259 companies – are now at least 20 per cent below their 52-week highs
PUBLISHED : Saturday, 15 December, 2018, 8:14am
UPDATED : Saturday, 15 December, 2018, 8:14am

US stocks fell 2 per cent on Friday, extending a recent decline that pushed key sectors and segments of the equity market into bear-market territory as concerns mounted over the health of the global economy.

The day’s losses were widespread, with all 11 of the primary S&P 500 sectors in negative territory.

Overall, the S&P was down 51 points (1.91 per cent), the Dow Jones Industrial Average fell 497 points (2.02 per cent), and the Nasdaq was off by 160 points (2.26 per cent).

According to Bloomberg data, more than half the components of the S&P 500 – 259 companies – are now at least 20 per cent below their 52-week highs, putting them below the threshold that signifies a bear market.

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Notably, Friday’s decline took the S&P 500 financial sector 20 per cent below a peak reached in late January.

The S&P 500 Energy Sector fell 2.4 per cent on Friday, and is now about 21 per cent below an October 9 peak.

The S&P 500 Materials sector fell 0.8 per cent. The industry is currently off about 20.4 per cent from a January peak, though it had already been trading in bear-market territory, having dropped past the 20 per cent threshold in October.

Other sectors aren’t far from a similar magnitude of declines. The S&P 500 industrial sector is down about 17 per cent from its 52-week high, and technology – a driver behind recent broad-market losses – is 15 per cent below its record. The Dow Jones transport Index, consider a barometer for economic activity, has dropped more than 17 per cent from mid-September.

More broadly, the Russell 2000 index and the S&P Small Cap 600 Index are both down about 19 per cent and the S&P 400 Midcap Index is about 15 per cent lower.

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The S&P 500 closed nearly 12 per cent below its record, the Dow Jones Industrial Average less than 11 per cent and the Nasdaq Composite Index about 15 per cent. All three are in correction territory, or off at least 10 per cent from a peak.