From Fred Imbert: Stocks traded sharply lower on Thursday, giving back some of the strong gains from the previous day, amid renewed tensions between China and the United States.
The Dow Jones Industrial Average fell 500 points, led by losses in Exxon Mobil and United Technologies. The S&P 500 pulled back 2 percent as the energy and consumer discretionary sectors lagged. The Nasdaq Compositedropped 2.1 percent.
Shares of trade bellwethers like Caterpillar, Boeing and Deere all fell more than 1.5 percent.
This decline comes after a historic surge on Wall Street. On Wednesday, the Dow rallied to close more than 1,000 points higher, its biggest single-day point gain ever. The day’s gain also marked the biggest upside move on a percentage basis for the Dow since March 23, 2009, when it rose 5.8 percentage points. The S&P 500 and Nasdaq also notch their best gains since March 23, 2009.
“Just when everyone had counted the market down, the market bounded back,” John Carey, a portfolio manager at Amundi Pioneer, told CNBC on Thursday. He described the Wednesday bounce on Wall Street as “very positive” and also “quite surprising.”
“I think it has to do with valuations, we got to a point where the market had sold off about 20 percent and price-to-earnings multiples had come down on the S&P from the low 20s to 15-16 times earnings and all of a sudden people looked around and thought stocks might be a good buy,” Carey said.
Furthermore, he added, there were “catalysts” for the market movement, citing reassurances from the White House that the jobs of both Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin were safe.
Still, Carey warned there remain “lots of uncertainties which could produce more volatility over the next days and weeks.”
The SPDR Dow Jones Industrial Average ETF (DIA) was trading at $223.94 per share on Thursday morning, down $4.77 (-2.09%). Year-to-date, DIA has declined -8.72%, versus a -9.29% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of CNBC.