February 09, 2018 08:20
The Dow Jones industrial average plunged more than 1,000 points Thursday as a weeklong market swoon continued.
The Dow dropped 1,032 points, or 4.1 percent, to 23,860. It's 10 percent below the record high it set just two weeks ago, putting it in what is known on Wall Street as a "correction.''
The Standard & Poor's 500, the benchmark for many index funds, gave up 100 points, or 3.8 percent, to 2,581. It also is 10 percent below the record high it set two weeks ago. The Nasdaq lost 274 points, or 3.9 percent, to 6,777.
After huge gains in the first weeks of this year, stocks tumbled Friday after the Labor Department said workers' wages grew at a fast rate in January. That's good for the economy, but investors worried it will hurt corporate profits and that rising wages are a sign of faster inflation. It could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy.
The market didn't get much help Thursday from company earnings reports, several of which disappointed investors. While U.S. companies mostly did well at the end of 2018, a number of them had a weak finish to the year.
Hanesbrands, which makes underwear, T-shirts and socks, reported a smaller profit than investors expected, and its forecast for the current year didn't live up to analysts' estimates either. The company also said it will pay $400 million to buy Australian retailer Bras N Things.
iRobot, which makes Roomba vacuums, plummeted 30 percent after projected a smaller annual profit than Wall Street was expecting. Twitter had a banner day, however, after turning in a profit for the first time. Its fourth-quarter revenue was also better than expected.
Online delivery company GrubHub soared after it announced a partnership with Yum Brands, the parent of Taco Bell and KFC. GrubHub will provide the delivery people and technology to let people order food from those restaurants.
Stocks in Europe declined and bond yields increased after the Bank of England said could raise interest rates in coming months because of the strong global economy. That also sent the pound higher. Britain's FTSE 100 fell 1.6 percent and the French CAC 40 lost 2.4 percent. Germany's DAX declined 2.6 percent.
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