Why the Dow keeps sinking

The gloom-and-doom on Wall Street has wiped out the stock market's gains for the year.The Dow dropped...

Posted: Nov 21, 2018 9:19 AM
Updated: Nov 21, 2018 9:19 AM

The gloom-and-doom on Wall Street has wiped out the stock market's gains for the year.

The Dow dropped 552 points, or 2.2%, on Tuesday. Plunging retailers like Target (TGT) and Kohl's (KSS) led the S&P 500 1.8% lower.

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Tech stocks once again got hit hard, with the Nasdaq sinking 1.7%. Apple retreated another 5% after Goldman Sachs dimmed its price target on the iPhone maker for the second time in a week.

All three major indexes have given up their gains on the year. The Dow is nearly 2,500 points off its peak.

"The highways will be crowded this evening as the Thanksgiving rush will begin in earnest, but this morning investors are rushing for the exits," Paul Hickey, co-founder of Bespoke Investment Group, wrote to clients on Tuesday.

The Dow lost nearly 400 points on Monday as well. This week's sell-off marks a continuation of a glum two months on Wall Street. The S&P 500 is down nearly 10% from its record high, flirting with official correction territory.

The losses have been sparked by a flurry of concerns about everything from higher interest rates and crashing oil prices to the US-China trade war. But the overarching theme is that investors are bracing for the end of the fantastic economic and profit growth that marked the past year. Analysts expect a deceleration in 2019 driven by tariffs, the fading impact of the tax cuts and higher borrowing costs caused by the Federal Reserve.

"Put simply, stocks have already started to price in the risk of an economic slowdown," Goldman Sachs chief US equity strategist David Kostin wrote to clients on Tuesday.

President Donald Trump said on Tuesday that the US economy is "doing great," but he urged the Federal Reserve to keep interest rates low.

"I think we have much more of a Fed problem than we do with anyone else," Trump told reporters.

Investors continue to flee from the tech darlings that once carried the market higher. Worries about lackluster demand for the latest iPhones have weighed heavily on Apple (AAPL). Other momentum stocks like Netflix (NFLX) and Amazon (AMZN) closed lower again. Google owner Alphabet (GOOGL) closed on Monday in its first bear market since 2011.

All told, the collective market value of Facebook, Amazon, Netflix, Alphabet, Apple and Microsoft has declined by more than $1.1 trillion.

Morgan Stanley warned on Monday that the US stock market is already in a bear market. The firm noted that more than 40% of the S&P 500 is down 20% from recent highs.

"The market is speaking loudly that bad news is coming," Morgan Stanley equity strategist Michael Wilson wrote to clients.

Slowdown fears were front-and-center in the retail sector. Disappointing results sent Target and Kohl's more than 9% lower on Tuesday. TJX Companies (TJX) and Ross Stores also retreated. Home improvement retailer Lowe's (LOW) lost 6% after posting results. The home improvement retailer has declined nine straight days.

Energy stocks were among the biggest losers. ExxonMobil (XOM), Chevron (CVX) and Hess (HES) all lost ground after US oil prices plummeted 7% to a 13-month low of $53.43 a barrel. Fears of a supply glut and weaker demand have knocked crude into a bear market. It's now down 30% from the recent high on October 3.

But some believe the market mayhem is overdone.

"I don't think we're headed for a recession," David Kelly, chief global strategist at JPMorgan told CNN Business. "The slowdown in the economy and the trouble in the market is going to stay the Fed's hand."

Kelly said he thinks the Trump administration will also "pull back" from the US-China trade war if it sees that the risk is a potential recession.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 352891

Reported Deaths: 7597
CountyCasesDeaths
Hinds24704451
DeSoto23619283
Harrison21395335
Jackson15984255
Rankin15957294
Madison11224227
Lee10952180
Jones9316171
Forrest9136163
Lauderdale8211244
Lamar736590
Lowndes7253152
Lafayette6658125
Washington5681140
Pearl River5396155
Oktibbeha506598
Bolivar5022134
Warren4828128
Panola4823112
Marshall4759106
Pontotoc455773
Neshoba4487181
Hancock444488
Union441479
Monroe4390138
Lincoln4247116
Pike3771114
Leflore3696125
Alcorn362474
Tate356188
Sunflower351794
Adams350690
Scott349177
Yazoo344877
Copiah333569
Simpson329191
Itawamba318581
Tippah316569
Coahoma316385
Covington305584
Prentiss304163
Leake291976
Marion291882
George285851
Wayne282345
Grenada272488
Newton269264
Tishomingo241670
Stone240038
Winston238484
Jasper236248
Attala229974
Chickasaw222760
Clay204654
Holmes204374
Clarke190480
Tallahatchie185842
Smith184936
Calhoun184632
Yalobusha174241
Walthall151249
Lawrence146426
Greene144735
Amite140144
Noxubee137635
Perry137038
Montgomery134644
Carroll127531
Webster125132
Jefferson Davis121334
Tunica116627
Benton108425
Claiborne106131
Kemper105029
Humphreys102533
Franklin88724
Quitman86819
Choctaw83619
Wilkinson79632
Jefferson72328
Sharkey52018
Issaquena1746
Unassigned00

Alabama Coronavirus Cases

Cases: 595816

Reported Deaths: 11561
CountyCasesDeaths
Jefferson865251591
Mobile50436872
Madison37905534
Shelby27652260
Tuscaloosa27422465
Montgomery26428628
Baldwin26175329
Lee17414181
Calhoun15549334
Morgan15265291
Etowah15106372
Marshall13248236
Houston12297294
Elmore11006220
St. Clair10903252
Limestone10867158
Cullman10643206
Lauderdale10374255
DeKalb9603193
Talladega9032188
Walker7873288
Autauga7635114
Blount7463140
Jackson7450117
Colbert6780142
Coffee6515132
Dale5803117
Covington4864125
Russell483543
Chilton4828117
Franklin465681
Tallapoosa4591156
Escambia457583
Chambers4007125
Dallas3756164
Clarke374663
Marion3490107
Pike336979
Lawrence3280100
Winston301973
Bibb293766
Geneva293083
Marengo263867
Barbour254361
Pickens247962
Butler243672
Hale236979
Fayette228565
Henry218845
Monroe206941
Randolph203844
Cherokee201748
Washington189439
Macon172252
Crenshaw171758
Clay167659
Cleburne161845
Lamar152638
Lowndes146555
Wilcox132731
Bullock126542
Conecuh123032
Coosa119729
Perry111228
Sumter110933
Greene99937
Choctaw64525
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Friday will be just a little warmer in the morning due to some cloud cover in the area. We will see some isolated to widely scattered showers and thunderstorms pop up over portions of our area due to a little bit of low pressure flowing through the area.
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