The Dow plunged over 1,100 points at close on Monday in its biggest decline since 2011 as the US stock market remained unsettled following last week’s rout. The three major indexes experienced more turbulence falling sharply in volatile trading stoked largely by inflationary fears.
The Dow Jones Industrial Average slid 1,175 points or -4.61% and over the last five days it fell -7.92%. The S&P 500 fell 113 points or -4.10%. Nasdaq dropped 273 points or -3.78%. The remarkable start to the year hit a snag last week after stocks pulled back. However, market commentators cautioned that the sell-off was a long overdue correction given the extraordinary long market bull run. Investors are pricing in a greater chance for more Federal Reserve rate hikes.
The sell-off was broad, among the laggards on the blue chip index were Apple which slid -2.50%, Boeing plummeted -5.74%, Amazon shaved -2.79% while Goldman Sachs fell -4.20%. Exxon Mobil fell -5.69% and Chevron dropped -5.03% after profit misses. Oil prices also took a hit as stock markets tumbled around the world. Brent crude for April fell 96 cents to close at $67.72 on the ICE Futures Exchange.
- Dow 24,342.69 -4.61%
- S&P 500 2,648.99 -4.10%
- Nasdaq 6967.53 -3.78%
- Russell 2000 1,499.79 -3.09%
- NYSE Composite 12,623.18 -3.53%
- Gold 1,340.2 +0.22%
- Oil WTI $63.74 -2.66%
- 10-Year Treasury 2.758% -0.088 bp
Wells Fargo falls 9% after Federal Reserve sanction
In a singular act, the Federal Reserve, put in place punitive measures on the third largest US bank last Friday and investors responded less than confidence as the bank's shares plunged close to 10% on Monday.
The central bank sanctioned Wells Fargo (down -9.22%) following what it called "recent and widespread consumer abuses and other compliance breakdowns". Wells Fargo is prevented from adding assets beyond its end of 2017 levels until there is an improvement in its governance and controls, effectively limiting its growth.
The Fed said in its statement: “The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers.” Well Fargo is also required to replace three of its directors by April.