Markets

Dow Jones, ASX: Wall St plunges as government shutdown looms

Written by The ReReport
As seen in the Source link, written by dailytelegraph.com.au on 2018-12-21 09:06:00

Australian shares are set to open flat as Wall Street extends its dreary December run in the wake of the latest Fed Reserve rate hike.The SPI200 futures contract was down one point, or 0.02 per cent, to 5,430.0, at 0800 AEDT on Friday, pointing to a flat open for the benchmark ASX/200 after the bourse slumped to a new two-year low the previous session.The Aussie dollar has edged higher, buying 71.17 US cents from 70.91 US cents on Thursday.In late trade on Wall Street, tech stocks were deep in the red and the S&P 500 languished at 15-month lows, with investors jittery after the Federal Reserve quashed hopes of a toned-down approach to its interest-rate hike path.The Dow Jones was down 495.29 points, or 2.12 per cent, at 22,828.37, the S&P 500 was down 49.23 points, or 1.96 per cent, at 2,457.73 and the Nasdaq Composite was down 72.98 points, or 1.1 per cent, at 6,563.85.Oil prices hit their lowest point in more than a year, weighed down by oversupply fears and the outlook for energy demand as equities tumbled.Aluminium also fell overnight, but iron ore went the other way, while safe-have gold soared by more than $18 an ounce as investors flocked to the safe haven.DOW ENDS 2 PER CENT LOWER — AFPWall Street suffered its second straight rout Thursday as worries about a US government shutdown added to upset at the Federal Reserve’s latest interest rate hike.The Dow Jones Industrial Average ended 2.0 per cent lower at 22,859.60, a loss of 460 points.The broadbased S&P 500 slid 1.6 per cent to 2,467.42, while the tech-rich Nasdaq Composite Index slumped 1.6 per cent to 6,528.41.A bruising December has set up Wall Street for its worst year since the financial crisis. The S&P 500 is currently down 7.7 per cent for the year and the Nasdaq is on the verge of a “bear market,” which is a drop of 20 per cent from its peak this year.The latest pullback came after Republican congressional leaders told reporters President Donald Trump would not sign a stopgap spending bill because it does not contain border wall funding.The US government only has funding to operate through December 21, and without an agreement will have to shut down.Trump’s rejection sent politicians scrambling for a new compromise, although Democrats have stood firm saying they will not support a spending measure that funds Trump’s wall on the US-Mexico border.The revived possibility of a shutdown worsened the downbeat mood on markets after the Federal Reserve announced another interest rate hike on Wednesday and made only subtle adjustments to the course of monetary policy tightening next year despite rising worries about global growth and a big pullback in the stock market.Analysts also said the US indictment of two Chinese hackers tied to Beijing’s security services reminded investors of the unsettled state of US-China trade relations.“We have a trade war, the economy weakening, and now the possibility of a shutdown,” said Peter Cardillo of Spartan Capital Securities. “All that is feeding by itself.”Originally published as Wall St plunges on shutdown fear