U.S. Stocks Showing Another Substantial Move To The Downside

Extending the sell-off seen last week, stocks have shown another substantial move to the downside during trading on Monday. With the continued decline, the major averages have fallen to multi-month intraday lows.

The major averages have climbed off their worst levels in recent trading but continue to post steep losses. The Dow is down 553.47 points or 1.6 percent at 33,711.90, the Nasdaq is down 331.12 points or 2.4 percent at 13,437.80 and the S&P 500 is down 91.88 points or 2.1 percent at 4,306.06.

Concerns about tightening monetary policy continue to weigh on the markets ahead of this week’s Federal Reserve meeting.

The Fed is scheduled to begin a two-day meeting on Tuesday, with the latest monetary policy decision due Wednesday afternoon.

While the Fed is likely to leave interest rates unchanged, the accompanying statement could hint at the first rate hike as early as the next meeting in mid-March.

Recent downward momentum is also contributing to continued weakness on Wall Street after the S&P 500 saw its worst week since March of 2020 last week.

Along with the Fed announcement, reports on consumer confidence, new home sales, durable goods orders and personal income and spending may attract attention in the coming days.

Energy stocks are seeing substantial weakness on the day, moving sharply lower along with the price of crude oil. Crude for March delivery is plunging $2.42 to $82.72 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 4.2 percent and the NYSE Arca Oil Index is down by 3.5 percent.

Significant weakness is also visible among airline stocks, as reflected by the 3.8 percent nosedive by the NYSE Arca Airline Index.

Gold, computer hardware, steel and financial stocks are also seeing considerable weakness, reflecting broad based selling pressure.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index rose by 0.2 percent, while Hong Kong’s Hang Seng Index slumped by 1.2 percent.

Meanwhile, the major European markets have all shown notable moves to the downside on the day. While the U.K.’s FTSE 100 Index has tumbled by 2.7 percent, the French CAC 40 Index and the German DAX Index are down by 3.7 percent and 4 percent, respectively.

In the bond market, treasuries are extending the upward move seen in the previous week. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.8 basis points at 1.719 percent.

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