Dow Jones drops 832 points in third worst drop in history

New York City. With bond prices dropping interest rates have been surging resulting in the Dow Jones Industrials Average falling over 200 poin

Stefane Marion, chief economist and strategist at National Bank Financial, believes that part of the problem with today's stock market is that global companies have been lowering their profit expectations for the next 12 months.

The yield on the 10-year U.S. Treasury bond, which rose to new seven-year highs last week, continued to move higher, yielding as much as 3.24 per cent on Wednesday.

The Nasdaq composite, which has a high concentration of technology companies, had its biggest loss in more than two years.

The stock market was dragged down by a sell-off in tech stocks, rising interest rates and tension over trade disputes with China.

"The tax cuts juiced earnings this year and that's not sustainable", he said. The CBOE Volatility Index, or VIX, a market barometer often dubbed Wall Street's fear gauge, surged more than 25%. That was its worst drop in eight months.

The Dow slipped 831.83 points, or 3.15 percent, at 25,598.74, the S&P was down 38.36 points, or 3.28 percent, at 2,785.68 and the Nasdaq was down 315.97 points, or 4.08 percent, at 7,422.05. Eastern time. It's on track for its fifth straight drop, which hasn't happened since right before the 2016 presidential election.

The tech-heavy Nasdaq composite dropped 3.1 per cent.

The S&P 500 fell 39 points, or 1.4 per cent, to 2,840.

The losses were widespread as bond yields remained high after steep increases last week. Stocks had come close to big drops in the last few days, but each time they recovered some of their losses.

October isn't even halfway over and its been the worst month in recent memory for semiconductor stocks especially.

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Apple gave up 4.6 per cent to US$216.36 and Microsoft dropped 5.4 per cent to US$106.16.

Amazon has soared 50 percent this year, but has fallen 14 percent from its all-time high in early September. Boeing lost 4.7 percent to $367.47 and Alphabet, Google's parent company, gave up 5 percent to $1,081.22.

Insurance companies slumped as Hurricane Michael hit the Florida Panhandle.

Luxury stocks were another casualty of worries of slowing China demand, sparked by LVMH's results. The two-year yield rose to 2.88 percent from 2.87 percent, and the 30-year yield climbed to 3.38 percent from 3.37 percent.

"If investors are going to take profits then it will be from some of the bigger, high-growth names", Nauman said.

The 10-year Treasury yield rose to 3.22 percent from 3.20 percent late Tuesday after earlier touching 3.24 percent.

Stocks are opening broadly lower on Wall Street led by drops in technology and industrial companies. "As stocks go down, tech goes down more".

"Amazon recently announced they were increasing wages, Facebook is spending a ton on security", she said. The stock fell 35.7 percent to 38 cents in morning trading. Sears has closed hundreds of stores and sold several famous brands or put them on the block as it sees more customers abandon its stores.

Oil prices were lower, with the USA benchmark West Texas Intermediate losing nearly $2 to trade at just over $73 United States a barrel. Brent crude, the global standard, lost 2.2 per cent to $83.09 a barrel in London.

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