Thomas Heath Local business reporter and columnist, writing about entrepreneurs and companies in the Washington metropolitan area August 7 at 4:36 PM
U.S. stocks took a round trip deep into negative territory Wednesday before finishing on an upward trajectory, as investors grimly absorbed a spate of overseas interest rate cuts.
Central banks in India, Thailand and New Zealand announced greater-than-expected rate cuts Wednesday, following signals from the European Central Bank and the Federal Reserve toward monetary easing as policymakers around the globe try to mitigate the fallout from the U.S.-China trade war that threatens to stall global growth.
The Dow Jones industrial average nose-dived 589 points after the Asian Pacific central banks announced their rate cuts but dug itself out as the day wore on and nearly broke even. It closed down 22 points, 0.09 percent, at 26,007. Walt Disney Co., JPMorgan Chase and IBM were the blue chip’s biggest drags.
The Standard & Poor’s 500-stock index hit a two-month low before an afternoon surge pared its losses and left the broad index up 2 points, about even on the day. The tech-heavy Nasdaq Composite spent the morning in the red before climbing back to a 30-point gain, or 0.4 percent.
All 11 stock market sectors went negative in morning trading. Six sectors remained in the red at the close, with financial services, energy and telecommunications the biggest losers. Oil prices sank to new lows on global oversupply and fears that an economic slowdown would curtail consumption.
“The petroleum complex keeps taking the worsening U.S.-China trade row hard,” said John Kilduff of Again Capital. “Demand growth estimates keep getting ratcheted down as the Asian economic region slows. Today’s weekly inventory report also