"People fear building prices into the system, both from China trade problems, other tariffs the USA has put into place, wage pressure, and today there is a little bit of concern about what the Hurricane in Florida could do to energy prices".
Jeremy Klein, chief market strategist at FBN Securities, said: "Portfolio managers tend to move to the sidelines in a skittish tape out of fear of suffering from a quick and sharp pullback".
Technology stocks slid more than 2 percent, the most among the 11 major S&P sectors, with the Philadelphia Semiconductor index down 3 percent after Swiss vacuum valve maker VAT Group said demand from chip equipment makers was softening. That hasn't happened since right before the 2016 presidential election.
The Toronto Stock Exchange closed down 336 points, or more than two per cent, on Wednesday, the fourth day in a row that the benchmark Canadian stock index was lower.
Just a day before the start of America's third-quarter earnings season, signs are mounting that companies might not be able to deliver the runaway growth that's bolstered equities so far in 2018.
The S&P 500 Index fell the most since February and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years as equity volatility spiked. Stocks had come close to big drops in the last few days, but each time they recovered some of their losses. The stock fell 15 per cent to 50 cents. Apple (AAPL) has declined 1.4% to $223.73, Facebook (FB) has fallen 1.8% to $155.09, Netflix (NFLX) has slumped 5.7% to $335.33, Amazon.com (AMZN) has dropped 3.2% to $1,810.09, and Alphabet (GOOGL) is off 2.1% at $1,120.08. (NYSE: NKE) and Boeing Co (NYSE: BA), which declined 6 percent and 3.8 percent, respectively.
Rising costs, as inflation and borrowing rates pick up, could also be a worry for stock markets.
Microsoft lost 1.4 per cent in early trading Wednesday and 3M gave up 1.6 per cent.
Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 miles per hour.
Luxury retailers tumbled after LVMH, the parent of Louis Vuitton, said its sales growth in China slowed. In theory, banks should do better if the Fed keeps raising interest rates and bond yields climb higher since it will make their loans more profitable.
United States stocks notched solid gains in the third quarter as investors brushed aside worries about trade wars and focused on strong corporate earnings and solid U.S. economic data.
Treasury yields hit 7-year highs, signaling rising interest rates and potential headaches for companies that borrowed extensively when money was cheap, only to face steep repayments in a higher-rate environment. The yield was just 2.82 per cent in last August.
Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in United States interest rates.
Sears Holdings plunged 37 per cent after the Wall Street Journal reported that the struggling retailer is preparing a bankruptcy filing.
Benchmark U.S. crude oil fell 2.4 percent to $73.17 a barrel in NY. It was more than $40 five years ago.
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