Traders work on the floor of the New York Stock Exchange (NYSE) in New York October 11, 2018. — Reuters pic
NEW YORK, Oct 12 — Wall Street extended its slide into a sixth session and a global equity index fell to a 1-year low yesterday as investors feared an escalating US trade war with China and risks from a recent climb in interest rates.
The Nasdaq flirted with correction territory, sliding as much as 10.3 per cent from its August 29 closing record high, before paring losses to end off those levels and avoiding confirming a correction.
MSCI’s gauge of stock performance in 47 countries dropped 2.2 per cent, falling below its February lows to trade at its lowest since October 2017.
Gold, typically seen as a safe-haven asset during times of extreme volatility, rose as sliding global stock markets prompted risk-wary investors to buy the metal, and a drop in US Treasury bond yields helped push the dollar lower.
In equities, Wall Street slid as risk-appetite showed no signs of picking up and volatility spiked. The Cboe Volatility index ended the day up at 24.98, its highest close since February 12, a day after the S&P 500 dropped more than 3 per cent in its biggest daily decline since February 8.
“When you have a shock day like yesterday, people are caught off guard, and there are a lot of adjustments going on below the surface. There tends to be a lot of volatility the day after a shock day, and over the next several days or weeks,” said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.
The selloff came as investors prepared for the start of US quarterly earnings, with JPMorgan Chase, Wells Fargo and Citigroup due to report today.
The Dow Jones Industrial