Dow plunges 1,175 points in wild trading session, S&P 500 goes negative for 2018

U.S. stocks fell sharply Monday, extending a steep sell-off from the previous session, as investors rushed for the exits in the wake of rising interest rates. For the S&P 500, it was the worst day in six years.

The Dow Jones industrial average shed 1,175.21 points to 24,345.75 and briefly declined more than 1,500 points. The 30-stock index also briefly traded flat earlier in the session, before the selling returned. The Dow also broke below 25,000 and erased its 2018 gains. It also dipped into correction territory.

The S&P 500 pulled back 4.1 percent — its biggest one day decline since August 2011— to close at 2,648.94. The broad index had traded positive earlier on Monday as the tech sector briefly rose. The S&P 500 also closed down more than 7 percent from an all-time high set last month and broke below its 50-day moving average, a key technical level. It also gave back all of its gains for 2018.

"We're not used to getting washouts like this anymore," said Quincy Krosby, chief market strategist at Prudential Financial. "The buy-the-dip mentality that has taken over hasn't allowed for that."

"This sell-off, in the bigger scheme of things, is not that big. But it is very important in psychological terms," Krosby said.

"What we noticed in January was that stocks and bond yields wanted to run through their year-end targets" to start off 2018, said John Augustine, chief investment officer at Huntington Private Bank. "I think both markets just need to take a breather." He also noted these pullbacks in bonds and stocks should be viewed as buying opportunities by investors.

Equities benefited from strong economic data and solid corporate earnings growth at the start of the year. But increasing inflation concerns have sent interest rates higher recently, rattling Wall Street.

The CBOE Volatility index (VIX), widely considered the best gauge of fear in the market, hit 37.32.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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