Dow Jones Plunges More Than 300 Points; 2014 Gains Erased
The Dow Jones Industrial Average and other major indices sustained heavy losses today as a smattering of bad news, both domestically and from around the world, provoked a stock sell-off large enough to cause the Dow to erase all of its 2014 gains.
Fox Business informs us that by the end of the trading day, the Dow had fallen by 317 points or 1.9% of its value. Similarly, the S&P500 dropped by 39.7 points, or 2% of its value and the Nasdaq lost 93.1 points, or 2.1% of its value.
Fortune tells us that contributing factors to the market’s stock sell-off today on the international front are primarily related to Argentina’s default on their debt (the second default within 13 years), and questions surrounding the sanctions imposed on Russia and what affects they may have on the global economy.
Domestic factors contributing to today’s stock sell-off across all indices are more numerous. Fox Business tells us that shares of the fast-food giant Yum Brands (parent company of KFC, Pizza Hut, and Taco Bell) came under assault after the company released a statement notifying investors that sales from its stores in China have suffered a “significant, negative impact” following Chinese news reports that the company’s supplier was furnishing the fast-food giant’s Chinese stores with post expiration date meat. The Inquisitr covers the recent Chinese fast-food scare in full detail.
News from the economic front was equally off-putting as Labor Department statistics showed that people filing for first time unemployment claims last week was revised upwards to 302,000 after being originally reported at 279,000. Fox Business also tells us that Chicago’s benchmark measurement of manufacturing activity in the Midwest, the Institute for Supply Management, slowed to 52.6 in July, which is down from 62.6 in June. The July index number is the institute’s lowest level since June, 2013. There is also a certain amount of uncertainty surrounding the monthly jobs report released by the Labor Department which is due tomorrow. Fortune reported that some of the wide ranging stock sell-off today could be due to investors speculating that the Federal Reserve could raise interest rates more quickly than expected.
Despite today’s stock sell-off across the Dow, Nasdaq, and other indices, not all investors are so pessimistic. Fox Business reports that Michael Block, chief strategist at Rhino Trading Partners, said that he still has a near-term bullish outlook. Mr. Block told Fox Business that, “This is all a lot of noise and with that, I am sticking by my desire to own stocks on weakness.”
Mr. Block’s optimism may prove true, but today’s stock sell-off, though not nearly as significant as the Dow’s massive drop in 2008, still underscores the fact that below the surface, economic indicators are telling many other investors that all is not well.
