INSTANT VIEW-U.S. share tumble continues, Nasdaq flirts with correction

NEW YORK, Oct 11 (Reuters) - Wall Street indexes continued their decline on Thursday as investors continued to shun risky investments, and Nasdaq looked like it could confirm a correction.

By late afternoon the S&P was down another 2 percent after shedding 3 percent in the previous day's session and Nasdaq fell as much as 10.3 percent from its closing record high, reached on Aug. 29. If it closes at these levels this would confirm a correction.




If we werent just heading into the earnings seasons maybe we wouldnt have gotten the result weve had in 2 days. You want to take some risk off the table going into that. People are concerned that after so many earnings seasons with just blow-out numbers I think people are concerned that theyre going to start to see the writing on the wall that maybe thats not going to hold.

Were not completely out of the equity market. You certainly could see a selloff and a bounce-back, particularly if Jay Powell thinks that it might be necessary to make a statement that makes him sound a little less hawkish then you definitely could see snap-back rally. Theres no Powell put. I dont see it in his make-up.


There was a major sell-off overnight (in Asia) following the sell-off yesterday. We never really got firm footing. People are basically unsure what to do, and we didnt see any real developing shift in the environment of the marketplacePart of the rally this morning was President Trump talking up a meeting with Chinese President Xi at the G-20 summit. But he indicated that a week ago last Thursday. So that wasnt a real news development, and the market went back to de-risking again.

You see more companies giving weaker guidance going forward. Thats an issue. People worry that theres a cyclical top coming up for earnings. Then we have two main headwinds: the trade war with China and rising interest rates. People fear that it will be harder to snap back if were seeing a cyclical top in earnings with those two headwinds, which are not going away. For most of this bull market, weve had very accommodative monetary policy, and obviously there was no trade war going. If anything, multinationals were benefiting from doing things offshore. Those were positive catalysts for global markets. Now theyre negative headwinds. Investors are concerned.

MARKET REACTION STOCKS: The Dow was down 515 points, or 2.01 percent. It hit its lowest level since July 13. The S&P 500, was 2.07 percent lower and hit the lowest since July 2. The tech-heavy Nasdaq was down 1.35 percent, hitting its lowest since May 9.

TREASURIES: The yield on the U.S. 10-year Treasury note fell to 3.1366 percent. VIX: The Cboe volatility index jumped 12 percent to 25.87, its highest since Feb 12. Dollar: The U.S. dollar index was off 0.5 percent (Compiled by Alden Bentley)