Dow industrials sink 831 points as tech companies plunge

Dow falls 500 points as rising Treasury yields drag down market

Dow falls 500 points as rising Treasury yields drag down market

The tumble came after the Dow Jones industrial average closed 831.83 points lower, its third-worst point decline ever, in NY trading on Wednesday amid concerns over a rise in interest rates.

The losses were widespread as bond yields remained high after steep increases last week.

The index was down 832 points, or 3 percent, at the end of trading Wednesday. The benchmark index fell for the fifth straight day, which hadn't happened since just before the 2016 presidential election.

The S&P 500 was down 55 points, or 1.9 percent, at 2,824-on pace for its worst day since June. Industrial and internet companies also fell hard. Boeing lost 4 per cent to $370.04 and Alphabet, Google's parent company, gave up 3.2 per cent to $1,109.08.

Benchmark U.S. 10-year Treasury notes rose late in the day, pushing yields down to 3.1931 percent.

The increase in yields from these bonds - which are parcels of United States government debt - can hurt stocks since they will provide competition for investors' cash.

"Both companies highlighted rising costs, not only input costs but increasing operating expenses (and) marketing expenses", she said.

Japan's Nikkei 225 added 0.2 percent, South Korea's Kospi dropped 1.1 percent and the Hang Seng in Hong Kong gained 0.1 percent. Berkshire Hathaway dipped 4.7 per cent to US$213.10 and reinsurer Everest Re slid 5.1 per cent to US$217.73.

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At 11:22 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was down 123.08 points, or 0.79 per cent, at 15,392.22. Those rates have been climbing after several encouraging reports on the economy. But higher interest rates can slow economic growth and erode corporate profits.

This time around, strong economic data anxious bond investors, who sent the benchmark yield on Tuesday to 3.261 percent, the highest since early May 2011. Adams, of Bloomberg Intelligence, said investors have concerns about their future profitability, too. Stocks had come close to big drops in the last few days, but each time they recovered some of their losses.

"The stock market in the USA has started to take notice, and will continue to, particularly if the speed at which rates rise becomes alarming", Jeffrey Gundlach, chief executive of Doubleline Capital, told Reuters last week.

"If the Feds are insane, this market reaction is bordering on insanity, as so many negative crosscurrents collide that is merely impossible to find a glint of optimism", he added. The most recent, starting in 2007, lasted about 2 1/2 years, though it took another four for the bull market to exceed highs reached in 2007.

Sears Holdings plunged 32 percent after the Wall Street Journal said the debt-laden retailer was preparing for a possible bankruptcy.

The Japanese yen strengthened 0.01 per cent versus the greenback at 112.29.

Benchmark U.S. crude oil fell 2.4 per cent to $73.17 a barrel in NY. The euro rose to $1.1525 from $1.1496.

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