When stocks go into free fall
FourFour2 – 4:10pm GMT – Vanguard Mutual Fund – Vanguard stocks go under pressure article Vanguard stocks, which fell 3.5 per cent to $42.37, were the best performing stock index for the day, beating expectations of a bounce-back from a rout triggered by the Federal Reserve’s decision to lift interest rates on Tuesday.
The Standard & Poor’s 500 index fell 2.2 per cent, and the Dow Jones Industrial Average lost 1.9 per cent.
Vanguard also added 2.1 per cent in its profit report on Tuesday and 2.3 per cent for its second quarter earnings.
“Investors have come out of the last bull market of the 2000s with more confidence, and they are still coming out of it with more risk than ever,” said Peter Fenson, an analyst at S&P Capital IQ.
The market rally in the US stock market has largely come on the back of a strong US dollar, which has boosted foreign exchange profits, and a growing appetite for technology stocks such as Apple, Amazon and Alphabet Inc. However, the US economy remains fragile.
The Dow Jones industrial average rose 22.7 points, or 0.8 per cent at the close, to 16,838.99.
The Nasdaq composite added 9.3 points, gaining 1.3 percent.
The S&p 500 index of 500 companies rose 1.5 points, hitting its highest level in more than four years.
The Russell 2000 index of companies in the energy sector, which includes oil and gas companies, added 4.2 points, its biggest gain in four months.
The US dollar has surged against other major currencies in recent weeks as investors have begun to demand a greater appreciation of their currencies.
The Nikkei 225 index of fixed income markets dropped 0.9 points, to finish down 0.6 per cent after recovering 0.3 percentage points in early trading.
The Shanghai Composite Index of 20,000 listed companies was down 0,823.50 points, at 4,066.06.
The Shenzhen Composite Index added 0.4 points, down 0 and a tenth from its opening day.
The Hang Seng index of China’s benchmark index fell 0.2 percent.
US stocks were trading lower, with the S&P 500 down 2.9 percent, the Dow down 4.3, the Nasdaq down 1.8, the Russell 200 down 1,879.80, the Shanghai Composite down 3.4, and Russell 1000 down 2,936.30.
UK stocks also slid, with Aberdeen 0.5 percent, Aberdeen Services Ltd down 0., and Royal Bank of Scotland down 0 percent.
In the US, Apple Inc fell 6.4 percent, but the tech giant added 1.2 million shares, the biggest gain since February.
Shares of Amazon.com Inc were up 7 percent, while Microsoft Corp fell 1.1 percent.
Analysts had been expecting a rebound after the Federal Open Market Committee (FOMC) voted to raise interest rates to 3.75 per cent from 3.0 per cent on Tuesday, and to 2.75 percent from 2.5.
The FOMC had initially set a 3.25 per cent cut to rates on June 16.
Billionaire activist investor Carl Icahn said he was pulling out of a $2 billion fund to fund a US government stimulus package to help businesses, and he is backing a US state-run bank that will help with the cost of infrastructure investment.
“If we do this, we can avoid the chaos of the Fed,” Icahn told Bloomberg TV on Tuesday morning.
On the UK market, the Sberbank AG fell 1,624.80 points, while Barclays Plc fell 2,743.12 points, and RBS Plc was down 1 percent.
Barclays and RBC are trading lower.
Meanwhile, the dollar weakened against the yen, falling 0.7 per cent against the dollar to 103.80 yen from 106.75 yen on Tuesday after trading up 0.1 yen in recent trading.
US markets were open at 103.75.