Dow Ends Wild Session Way off Lows
U.S. stocks cut sharp losses and ended the wild session far off their lows on Wednesday as cryptocurrency prices largely recovered, but the weakness in speculative pockets of the market still weighed on sentiment.
The Dow Jones Industrials came off their lows of the day, but still submerged 164.62 points below breakeven to 33,896.04
The S&P 500 still lost 12.15 points, to 4,115.68, as nine out of 11 sectors registered losses.
The NASDAQ fought its way back to within 3.9 points of breakeven to 13,299.74, as some of the major tech stocks reversed higher including Facebook, Netflix, Microsoft and Alphabet.
The major averages briefly added to their losses in afternoon trading after the Federal Reserve’s minutes from its April meeting hinted at reconsidering its asset purchase programs in upcoming meetings.
The Fed’s minutes said a strong pickup in economic activity would warrant discussions about tightening monetary policy in the coming months.
Chairman Jerome Powell said after the meeting that the recovery remains “uneven and far from complete” and the economy was still not showing the “substantial further progress” standard the committee has set before it will change policy
Wall Street had another wild session with tech stocks sliding in the morning as investors were rattled by a sudden plunge in cryptocurrencies including bitcoin.
Later the weakness spilled over into other sectors with the S&P 500 dropping 1.6% at its session low. The exception was a handful of retailers that reported solid earnings including Target.
Sentiment in the tech sector was dented by a drop in cryptocurrencies including bitcoin. The world’s largest digital token plunged 30% at its low of the session to just above $30,000 according to Coin Metrics.
Bitcoin has been cut in half since hitting an all-time high above $64,000 in mid-April. On Tuesday, China warned financial institutions not to conduct crypto-related business, possibly sparking the selloff.
Tesla, a big holder of bitcoin, declined 2.5%. Microstrategy, another company which bought a large amount of bitcoin for its corporate treasury, tanked by 6.6%. Coinbase, the newly public crypto exchange, tumbled nearly 6%.
Prices for 10-Year Treasurys were lower, raising yields to 1.67% from Tuesday’s 1.64%. Treasury prices and yields move in opposite directions.
Oil prices sank $2.09 to $63.40 U.S. a barrel.
Gold prices gained $2.60 to $1,870.60 U.S. an ounce.