Dow drops more than 300 points as stock market decline deepens

By Mark DeCambre, MarketWatch, Chris Matthews

US stocks extended their losses at noon, relying on a pullback caused by investors' negative reaction to the Fed's minutes, interpreted as a bit hawkish, as well as a difficult day for investors. Chinese stocks (http://www.marketwatch.com/story/ Asian market downturn led by sharp declines in China-2018-10-17), which dropped to new lows in four years.

What is the performance of benchmarks

The Dow Jones Industrial Average Index fell 334 points, or 1.3%, to 25,374, and that of the S & P 500 Index, by 38 points, to 2,771, a drop of 1.4%. At the same time, the Nasdaq composite index lost 75 points (down 1.9%) to 7500 in morning trading.

On Wednesday, the Dow ended the day with 91.74 points, or 0.4%, at 2706.88. The S & P 500 lost 0.71 point, or less than 0.1%, falling to 2,809.21, while the Nasdaq composite index lost 2.79 points to close at 7,642.70.

The three major benchmarks have not recorded consecutive losses since October 11, according to FactSet data.

What is the engine of the markets?

Chinese stock markets hit their lowest level in four years and a seemingly fierce Fed combined on Thursday to undermine investor sentiment.

The minutes of the September Fed meeting, released on Wednesday, said policymakers were ready to move forward (http://www.marketwatch.com/story/feder-reserve-minutes-indicate). – Interest-rates-will-have- increase enough to slow the economy 2018-10-17) and will likely increase rates as early as December, as expected. The tightening of the policy is not a surprise, but it raises concerns about rising borrowing costs and its potential impact on stock prices, market participants said.

Last week's drop in inventories was partly attributed to higher US government bond yields, which may also reduce equity appetite compared to the so-called safe treasures. Rate increases should further increase yields.

Read: Here's why stock investors suddenly panicked about rising bond yields (http://www.marketwatch.com/story/stock-market-investors-are-right-to-be-frightened-by-rising- bond- returns-economist-2018-10-12)

Concerns about the vitality of Asian markets, especially China, could also weigh on the investment climate. The Shanghai Composite Index fell 2.9% and the Shenzhen Composite Index 2.7%. The weak markets in Beijing came after the Chinese currency, the yuan, briefly touched its weakest level since January 2017. A dollar reached 6.9379 yuan, up 0.2%. These currency movements came after the US Treasury refused to designate China as a currency manipulator (http://www.marketwatch.com/story/us-treasury-declines-to-label-china-a-currency-manipulator -but-says-recent-) yuan-weakness-is-a-worry-2018-10-17) in its semi-annual report on exchange practices released Wednesday night.

The United States and China have been trapped in a niche market that shows no signs of easing and is likely to produce intermittent headwinds for the markets.

What stocks are under discussion?

Shares of Philip Morris International Inc. (PM) jumped 3.4% after the company exceeded earnings guidance for the third quarter.

United Rentals Inc. (URI) was S & P's biggest loser, dropping 9.4% after equipment leasing company surpassed Wall Street estimates for the quarter (http://www.marketwatch.com). .com / story / united-rentals-shares-slide-after-earnings-2018-10-17) but said his outlook did not include a pending acquisition of $ 2.1 billion.

Caterpillar Inc. (CAT) led the Dow's descent, with a 3.9% drop in its shares compared to the release of its results on October 23rd.

The shares of Alcoa Corp. (AA) climbed after earnings above expectations (http://www.marketwatch.com/story/alcoa-stock-rises-on-earnings-beat-company-predicts-2018-aluminium-deficit-2018 -10-17) and the leaders' forecasts concerning an aluminum deficit for this year. The stock is up 7.3%.

Shares of Invesco Ltd. (IVZ) rose 2.6% after announcing the acquisition of OppenheimerFunds, a subsidiary of Massachusetts Mutual Life Insurance.

Shares of Endocyte Inc. (ECYT) climbed more than 50% after Novartis AG (NOVN.EB) (NOVN.EB) announced plans to buy the anti-cancer drug maker for 2, $ 1 billion (http://www.marketwatch.com/story/novartis-elevators-view-announcement-21b-endocyte-deal-2018-10-18).

The shares of Travelers Cos. Inc. dropped by 1.4% in the morning, although it has published results (http://www.marketwatch.com/story/travelers-profit-business-as-catastrophe-losses-loss-2018- 10-18) and revenues that exceed analysts' expectations.

Danaher Corp. (DHR), the stock fell 2.3% Thursday morning, but also announced earnings and third-quarter earnings higher than analysts' estimates.

The financial results of American Express Co. (AXP) and PayPal Holdings Inc. (PYPL) were expected after the close.

What data are developed?

The first claims of unemployment fell by 5,000 compared to last week, when the Ministry of Labor reported that only 210,000 Americans had applied for initial unemployment benefits in the week ending October 13, according to an economist's estimates, according to a MarketWatch survey, and nearly 49 years ago the lowest (http://www.marketwatch.com/story/jobless-claims-drop-5000-to-210000-in -Mid-October-2018-10-18).

The Philly Fed manufacturing index is slightly below (http://www.marketwatch.com/story/philly-fed-manufacturing-index-signals-steady-growth-in-octobre-2018-10-18) last month, with an impression of 22.2 in October, against 22.9 in September. Nevertheless, the figures have exceeded expectations and indicate healthy activity in the factories sector.

The Conference Board said its key economic indicators rose 0.5% in September.

What do the strategists say?

Tom Essaye, chairman of the Sevens Report, pointed out that weak Japanese export statistics and the poor performance of the Chinese stock market were one of the reasons for the weakness of pre-market trading on Thursday morning.

"Are there any extremely negative events for US stocks? Probably not, but we need good news for the market to strengthen," he said. Essaye predicts that as the earnings season warms up next week, good news will be forthcoming: "But as long as we do not get strong earnings growth and macro data, stocks will move sideways or even down ".

Jay Hatfield, Chief Executive Officer and Portfolio Manager, Infrastructure Capital Management, attributes recent stock weakness to "normal behavior of the October stock market", a result of increased short-term interest and lower redemptions generally intervened on the eve of the results season. "We will stay away for the coming week as we find the bottom," he said.

(END) Dow Jones Newswires

October 18, 2018 12:15 pm ET (4:15 pm GMT)

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