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US: Stocks sink on dollar fears; Dow -1.85%
[NEW YORK] The Dow dumped more than 330 points Tuesday on renewed worries about higher interest rates and the soaring dollar.
The Dow Jones Industrial Average slumped 332.78 points (1.85 per cent) to 17,662.94.
The broad-based S&P 500 fell 35.27 (1.70 per cent) to 2,044.16, while the tech-rich Nasdaq Composite Index sank 82.64 (1.67 per cent) to 4,859.80.
The dollar pushed to multi-year highs against the euro and the yen amid elevated expectations that the Federal Reserve will raise near-zero rates more quickly than previously anticipated after Friday's strong US jobs report.
Jason Furman, chairman of the White House Council of Economic Advisers, highlighted the drag on US exporters from the strong greenback at a Washington business conference.
"The jobs report from Friday was a wake-up call that high rates are likely coming sooner rather than later and that they're not going to be taken well by the equity markets," said Michael James, managing director of equity trading at Wedbush Securities.
The sell-off was fairly broad-based, but large banks suffered more than most sectors. Dow member JPMorgan Chase lost 2.5 per cent, while Citigroup tumbled 3.3 per cent.
One day after launching its smartwatch, tech heavyweight Apple fell 2.0 per cent. Other tech stocks also dropped, including Google (-2.2 per cent) and Facebook (-2.4 per cent).
Dow component Chevron fell 1.0 per cent as it announced plans to divest US$15 billion in assets through 2017, up from the US$10 billion previously targeted.
Youth-oriented apparel retailer Urban Outfitters was a standout, jumping 11.5 percent after reporting that fourth-quarter comparable sales rose six percent. Net income dropped 9.5 per cent to US$80.3 million.
Chipmaker Qualcomm fell 1.1 per cent even after announcing it would launch a new US$15 billion share repurchase programme and hike its dividend by 15 per cent.
Bond prices rose. The yield on the 10-year US Treasury dropped to 2.13 per cent from 2.19 per cent, while the 30-year declined to 2.73 per cent from 2.80 per cent. Bond prices and yields move inversely.