Stocks continue to plummet
U.S. equity markets dropped sharply on Thursday as the Nasdaq neared bear-market territory, and global markets eyed more negative central bank interest-rate policy.
The Dow Jones Industrial Average was 321 points lower, or 2.02% to 15592. The S&P dropped 31 points, or 1.67% to 1820, while the Nasdaq Composite declined 50 points, or 1.18% to 4233.
Financials and energy led the declines, while the telecom traded in positive territory.
Today’s Markets
Wall Street extended a sharp selloff on Thursday after Sweden’s central bank slashed interest rates further into negative territory, and Federal Reserve Chief Janet Yellen discussed again the possibility of negative interest rate policy (NIRP) in the U.S.
In her remarks to the Senate Banking Committee, Yellen said the central bank has not ruled out negative rates as a tool to help boost inflation in the nation.
“We’re taking a look at them again because we’d want to be prepared in the event we would need to add more accommodation. We haven’t finished that evaluation…I wouldn’t take [negative rates] off the table,” she said during the question and answer period of the testimony.
She later said it’s not the “most likely scenario.”
Larry Shover, chief investment strategist at Solutions Fund Group, said it can’t be overstated how “detrimental” negative interest rates are for market action.
“They are destroying bank stocks and in turn killing the market. Negative rates appear to be the preferred policy choice of central banks and this has played a key role in crushing bank stocks over the last several weeks,” he said.
