The Dow tumbles more than 400 points

Back in late January and early February, there was a 10-per-cent correction in the S&P 500, with stock investors spooked as Treasury yield increases intensified with a monthly payrolls report showing the biggest wage gains for workers since 2009.

The Dow Jones industrial average lost 248, or 0.9 percent, to 26,183, and the Nasdaq composite dropped 145, or 1.9 percent, to 7,589. The Nasdaq dropped more than 4% in the worst percentage decline since June 2016. Earnings season should improve investors' moods through the end of the year, he writes, with a cycle peak in 2020 and the next major low not due until 2020. Berkshire Hathaway dipped 4.7 per cent to US$213.10 and reinsurer Everest Re slid 5.1 per cent to US$217.73. Concerns about consumer spending have also led to jitters about United States companies as they prepare to unveil results for the third quarter of the year over the coming weeks. Bond yields move in the opposite direction to price. Higher rates can also slow economic growth, making it more expensive for businesses to borrow and for consumers to spend.

Gina Martin Adams, chief equity strategist for Bloomberg Intelligence, said the stocks have become more volatile in the last few months because investors have concerns about their future profitability. She said they also fear that company profit margins will be squeezed by rising costs, including the price of oil. Yields on 3-year notes have recently traded just above 3.0 percent, providing long-absent competition for investment returns with equities.

Stocks have slumped over the last week as a combination of strong economic data and positive commentary from Federal Reserve leaders sent bond yields rocketing higher as investors bet that interest rates will keep rising.

Sears Holdings plunged 37 percent after the Wall Street Journal reported that the struggling retailer is preparing a bankruptcy filing. The stock fell 34 percent to 38 cents in morning trading. A move of more than two deviations, or 40 basis points now, leads to negative S&P 500 returns, Goldman says.

This time around, strong economic data anxious bond investors, who sent the benchmark yield on Tuesday to 3.261 per cent, the highest since early May 2011.

Bond yields and therefore interest rates have been rising for more than two years as the USA economy grew strong.

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The 10-year Treasury yield remained at 3.20 percent, about where it was late Tuesday, after earlier touching 3.24 percent. Over the years, Sears has closed hundreds of stores and sold several famous brands.

CVS dipped 0.1 per cent to $79.40 and Aetna added 0.5 per cent to $204.64. Natural gas rose 0.6 per cent to $3.28 per 1,000 cubic feet.

Benchmark U.S. crude oil fell 2.4 per cent to $73.17 a barrel in NY.

The S&P 500 fell 54 points, or 1.9 percent, to 2,825.

Shares in upscale jewellery retailer Tiffany & Co and perfume maker Estee Lauder both fell 7 percent after a warning from French luxury goods firm LVMH about softening demand in China.

The S&P 500 fell 39 points, or 1.4 percent, to 2,840.

CURRENCIES: The dollar held steady at 113.05 Japanese yen.

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