Stocks Post Worst Losses Of Year So Far; Bonds, Oil In Focus

Eileen GuzmanJan 31, 2018

At 2:50 p.m. ET, the Dow Jones Industrial Average fell 366.73 points, or 1.39 percent, to 26,072.75, the S&P 500 lost 29.99 points, or 1.05 percent, to 2,823.54 and the Nasdaq Composite dropped 69.35 points, or 0.93 percent, to 7,397.16.

So what's next? While that's anybody's guess, in the past, months of concurrent gains in the S&P 500 and VIX led to rallies in the equity measure in the following month two-thirds of the time - and the gains were greater in that next month 72 percent of the time, data compiled by Bloomberg show.

Health care was the worst-performing sector in the S&P, a selloff driven by news that JPMorgan Chase (NYSE:JPM), Berkshire Hathaway (NYSE:BRKA) and Amazon.com (NASDAQ:AMZN) are teaming up to address rising medical costs for employees. The stock gained $3.83, or 3.9%, to $101.45.

Rising bond yields added to concerns that stock prices have been rising faster than normal. That's the highest the rate has been since April 2014. Bond yields rose, weighing on utilities and other bond proxies. "Investors are stepping back and reevaluating if their holdings can surpass this revised hurdle".

But some investors speculated that the growing strength in the United States economy and labour market could prompt the central bank to perhaps forecast an extra rate increase this year.

Energy stocks fell amid a 1.6% drop in USA oil futures, which settled at $64.50 a barrel. Noble Energy fell $1.73, or 5.4 percent, at $30.40.

Benchmark US crude slid $1.06, or 1.6%, to settle at $64.50 a barrel on the New York Mercantile Exchange.

Gold fell $4.90 to $1,335.40 an ounce. Copper slipped 1 cent to $3.19 a pound.

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