U.S. stocks suffered the biggest two-day retreat since September, as investors weighed the impact of the Federal Reserve’s interest-rate increase and the prospects for slowing global growth.
The Dow Jones Industrial Average tumbled more than 300 points, as Apple Inc., Walt Disney Co. and Boeing Co. fell at least 2.7 percent. Banks, technology and consumer companies in the Standard & Poor’s 500 Index all lost more than 1.4 percent to lead a broad selloff.
The S&P 500 fell 1.8 percent to 2,005.44 at 4:03 p.m. in New York, to its lowest since Oct. 14 and erased a weekly climb after rising as much as 3 percent.
Equities remained under pressure for a second day after the Fed’s first rate increase in nearly a decade. With the prospect of the central bank withdrawing stimulus, investors are growing cautious as earnings and ultimately the economy are left to drive stock prices.
The S&P 500 rebounded as much as 13 percent from an August low through early November, before giving up more than 4 percent since then. The index has fallen 3.6 percent in December, bucking the historical seasonal trend of gains, and headed for the biggest annual drop since the 2008 financial crisis.
U.S. stocks fluctuated near a two-month low amid turbulence in credit markets and as global growth concerns linger before the Federal Reserve prepares to raise interest rates.
Bond market anxiety has caught the notice of equity investors after Third Avenue Management froze redemptions at a high-yield mutual fund last week, and Lucidus Capital Partners liquidated its entire high-yield portfolio. The SPDR Barclays High Yield Bond ETF, a proxy for the market, slipped 0.1 percent after falling 2 percent on Friday, its biggest one-day drop in four years. Crude oil fell for a seventh day on Monday.
The Standard & Poor’s 500 Index rose 0.1 percent to 2,015.25 at 9:33 a.m. in New York, after sliding 1.9 percent Friday to cap the gauge’s worst week since August.
The S&P 500 slid to a two-month low on Friday, rounding off its first weekly drop in four. Financial shares tumbled as asset managers were routed following Third Avenue’s move to freeze redemptions in its $ 789 million Focused Credit Fund. Shares of the $ 211 million AdvisorShares Peritus High Yield ETF declined 4.3 percent, the second-worst performer among 44 U.S. high-yield ETFs tracked by Bloomberg. The ProShares Ultra High Yield ETF was the worst performer, declining 5.8 percent on Friday.