Dow Sheds Nearly 600 Points, S&P 500 in Correction in a Wild Day on Wall Street
U.S. stocks plunged more than 3.5 percent on Monday, closing off session lows in high volume trade as fears of slowing growth in China pressured global markets.
S&P 500 ended nearly 80 points lower, off session lows of about 104 points lower but still in correction territory after the tech sector failed intraday attempts to post gains. Cumulative trade volume was 13.94 billion shares, the highest volume day since Aug. 10, 2011.
The major averages had a volatile day of trade, plunging sharply in the open and more than halving losses to trade less than 1 percent lower on the day, before closing down more than 3.5 percent.
"I think we probably rallied too fast. A lot of people that covered their shorts got their shorts covered," said Peter Coleman, head trader at Convergex. He noted the Dow was still trading several hundred points off session lows and that a close better than 500 points lower would be a good sign.
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"The market's going to be focused on China tonight to see if they come on tonight with something that would be considered a viable (way) to stimulate growth in that economy," said Quincy Krosby, market strategist at Prudential Financial.
The Dow Jones industrial average ended nearly 600 points lower after trading in wide range of between roughly 300 to 700 points lower in the minutes leading up to the close.
In the open, the index fell as much as 1,089 points, making Monday's move its biggest intraday swing in history. In midday trade, the index pared losses to trade about 110 points lower.
The blue-chip index posted its biggest 3-day point loss in history of 1,477.45 points.
During the first 90 minutes of trade, the index traveled more than 3,000 points in down and up moves.
"I'm hoping for some stability here but I think markets remain very, very vulnerable to bad news (out of) emerging markets," said Dan Veru, chief investment officer at Palisade Capital Management.
He attributed some of the sharp opening losses to exchange-traded funds. "It's so easy to move a bajillion dollars in a nanosecond."
Trading in stocks and exchange-traded funds was paused more than 1,200 times on Monday, Dow Jones said, citing exchanges. Such pauses total single digits on a normal day, the report said. An increase or decline of five percent or more triggers a five-minute pause in trading, Dow Jones said.
The major averages came sharply off lows in midday trade, with the Nasdaq off as low as less than half a percent after earlier falling 8.8 percent. Apple traded more than 1.5 percent lower after reversing losses to briefly jump more than 2 percent.
"There was sort of a lack of follow-through after the morning's crazy action in the overall market," said Robert Pavlik, chief market strategist at Boston Private Wealth. "The selling really dissipated once we got to around 10 o'clock."
He attributed some of the late morning gains to a short squeeze and bargain hunting.
Art Hogan, chief market strategist at Wunderlich Securities, noted that the sharp opening losses were due to great uncertainty among traders and the implementation of a rare market rule.
The New York Stock Exchange invoked Rule 48 for the Monday stock market open, Dow Jones reported.
The rule allows NYSE to open stocks without indications. "It was set up for situations like this," Hogan said. The rule was last used in the financial crisis.
Stock index futures for several major indices fell several percentage points before the open to hit limit down levels.
Circuit breakers for the S&P 500 will halt trade when the index decreases from its previous close by the following three levels: 7 percent, 13 percent, and 20 percent.
"Fear has taken over. The market topped out last week," said Adam Sarhan, CEO of Sarhan Capital. "We saw important technical levels break last week. Huge shift in investor psychology."
"The market is not falling on actual facets of a sub-prime situation. It's falling on fear of the unload of China. That's really behind this move," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The CBOE Volatility Index (VIX), considered the best gauge of fear in the market, traded near 40. Earlier in the session the index leaped above 50 for the first time since February 2009.
"When the VIX is this high it means there's some panic out there," said Randy Frederick, managing director of trading and derivatives at Charles Schwab.
However, he said with stocks more than halving losses he "wouldn't be surprised if we closed positive." "If you could move it that far you could move it another 350 points" on the Dow," he said.
Overseas, European stocks plunged, with the STOXX Europe 600 down more than 5 percent, while the Shanghai Composite dropped 8.5 percent, its greatest one-day drop since 2007.
Treasury yields came off session lows, with the U.S. 10-year yield at 2.01 percent and the 2-year yield at 0.58 percent.
The U.S. dollar fell more than 1.5 percent against major world currencies, with the euro near $1.16 and the yen stronger at 119 yen versus the greenback.
A U.S. Treasury Department spokesperson said in a statement that "We do not comment on day-to-day market developments. As always, the Treasury Department is monitoring ongoing market developments and is in regular communication with its regulatory partners and market participants."
The Dow transports ended more than 3.5 percent lower to approach bear market territory.
About 10 stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 901 million and a composite volume of 4 billion as of 2:05 p.m.
Crude oil futures settled down $2.21, or 5.46 percent, at $38.24 a barrel, the lowest since February 2009. In intraday trade, crude oil futures for October delivery fell as much as $2.70 to $37.75 a barrel, a six-and-a-half-year low.
Gold futures settled down $6.10 at $1,153.60 an ounce.
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Can Anyone Stop the $38 Billion Airline Fee Squeeze?
U.S. airlines earned $2.6 billion in fees and frequent flier mile sales in 2014, an 18.7 percent increase from 2013, according to an annual report by consultancies IdeaWorks and CarTrawler.
That represents the eighth consecutive year that carriers saw substantial revenue ancillary to ticket sales. Globally, ancillary revenue soared more than 20 percent to $38.1 billion.
“Ancillary revenue is an increasingly important indicator of commercial success, and a major contributor to the bottom line of airlines across the globe,” said Michael Cunningham, CarTrawler’s Chief Commercial Officer, in a statement.
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By passenger, additional revenue grew by 8.5 percent to $17.49. Low cost carriers increased ancillary revenue by 32.8 percent for the year, or $2.9 billion.
Ten airlines earned two-thirds of the ancillary revenue, led by United Airlines, American/U.S. Airways, and Delta. Delta brought in $350 million through its Comfort Plus program, which allows passengers to pay extra for more legroom and priority boarding.
Among passengers’ most hated fees are checked bag fees. Airlines typically charge $25 for the first bag, $35 for the second, and more than $100 for a third bag.
As frequent fliers turn to branded credit cards as a means of avoiding fees, airlines are still earning money. Last year, American’s Citibank-issued credit card, which gives consumers one free checked bag and priority boarding, yielded an additional $624 million for the carrier last year.
The additional fees are not improving the customer experience. More than 60 percent of consumers surveyed by the U.S. Travel Association in March said they were frustrated with air travel generally.
Memo to Michelle Obama: Americans Still Aren’t Eating Their Greens
Maybe First Lady Michelle Obama should refocus her healthy eating campaign more on adults than children. Fewer than 20 percent of American adults are eating enough fruits and vegetables, newly released data from a Centers for Disease Control and Prevention survey.
The United States Department of Agriculture’s nutrition guidelines recommend that Americans have two to three cups of vegetables every day, along with 1.5 to two cups of fruit. Based on those criteria, only 13 percent of adults in the survey ate enough fruit and a meager 9 percent of individuals ate enough vegetables. These numbers are worse than in years past. Between 2007 and 2010, 76 percent of Americans didn’t consume the recommended amount of fruit and 87 percent failed to eat enough vegetables.
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What’s more, while consumption of fruits and vegetables varies substantially from place to place, the residents of each and every state in the union fell short of the USDA recommendations. In Tennessee, 7.5 percent of residents consume enough fruit, while in Mississippi, a mere 5.5 percent of individuals eat enough vegetables. California ranked highest for eating both fruits and vegetables, but even there, just about 18 percent eat enough fruit and 13 percent eat enough veggies.
“Substantial new efforts are needed to build consumer demand for fruits and vegetables through competitive pricing, placement, and promotion in child care, schools, grocery stores, communities, and worksites,” the CDC report says.
The report comes out after a study published in last month’s JAMA Internal Medicine found that fewer than one-third of Americans are currently at a healthy weight. The majority of individuals are either overweight or obese.
Diane von Furstenberg Will Sell a Purse that Charges Your Phone
Fashion mogul Diane von Furstenberg said she will launch a high-tech purse that automatically—and cordlessly—charges smartphones.
The purse, which does not yet have a price tag, will go on sale in limited edition this holiday season, before rolling out broadly next year. The designer is working with an undisclosed technology partner on the handbag.
"My role in fashion is really solution driven," von Furstenberg said. "I'm always on the go, so [it's important] you have everything at the right time."
The idea of creating a handbag that charges a smartphone isn't entirely new. Kate Spade recently announced that it will launch a similar product line this fall.
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Von Furstenberg, a regular in Sun Valley, Idaho, took the stage at this year's Allen & Co. conference for a panel on the future of fashion, along with Spanx founder Sara Blakely.
She's there to meet with technology companies as she works to bring fashion into the future.
"Technology is the biggest revolution," von Furstenberg said. "It's such a big part of our lives, we do everything with technology, so it's not even separate anymore. It just is."
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Though she doesn't wear an Apple Watch, the designer said she's also interested in wearable technology. At her New York Fashion Week show in September 2012, she sent models down the runway wearing Google Glass.
But von Furstenberg cautions the term "wearable tech" will soon become obsolete.
"Wearable technology won't even be a word anymore, because everything you do will have technology," she said.
Von Furstenberg added that technology isn't just important for the future of fashion products—it's already crucial to their marketing.
"If you're interested in millennials, everyone is on social media and everyone is a brand," she said. "It's very interesting to brands to see how they can work with a generation, who each of them is [their own] brand."
This article originally appeared on CNBC.
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Corporate Sponsors Pass on Women's World Cup Ticker-Tape Parade
While the country celebrates the U.S. Women’s Soccer team’s World Cup Championship with a New York City ticker tape parade, corporations have been reluctant to pony up cash to cover the $2 million celebration.
Major League Soccer, Nike, fod company Mondelez and video game giant Electronic Arts have contributed a total $450,000 toward the parade, leaving New York City to cover the difference, the New York Post reports. That includes the cost of cleanup and security.
By contrast, the 2012 parade that celebrated the New York Giants winning the Super Bowl had more than a dozen corporate sponsors.
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City officials told the Post that the dearth of sponsors reflected the short period of time in which the city pulled together plans for the parade. The team is the first women’s squad to receive a New York City ticker tape parade, although the city has honored individual women, such as Olympic athletes and Amelia Earhart.
More than 12,000 people entered a lottery for tickets to the parade, which will feature the team atop patriotic floats moving down the Canyon of Heroes in lower Manhattan as spectators throw confetti from surrounding buildings.
While companies may not have shown much interest in the parade, they are clearly interested in star Carli Lloyd. Her agent has repeatedly received more than 200 inquiries from marketers who want to work with the athlete.
That’s good news for Lloyd, who like all other National Women’s Soccer League players, is subject to a $37,800 salary cap, about one 10th of what the average male Major League Soccer player makes in a year.
Corporate Sponsors Didn't Kick in Much for Women's World Cup Parade
While the country celebrates the U.S. Women’s Soccer team’s World Cup Championship with a New York City ticker tape parade, corporations have been reluctant to pony up cash to cover the $2 million celebration.
Major League Soccer, Nike, fod company Mondelez and video game giant Electronic Arts have contributed a total $450,000 toward the parade, leaving New York City to cover the difference, the New York Post reports. That includes the cost of cleanup and security.
By contrast, the 2012 parade that celebrated the New York Giants winning the Super Bowl had more than a dozen corporate sponsors.
Related: For World Cup Hero Carli Lloyd, 16 Minutes Can Mean Millions
City officials told the Post that the dearth of sponsors reflected the short period of time in which the city pulled together plans for the parade. The team is the first women’s squad to receive a New York City ticker tape parade, although the city has honored individual women, such as Olympic athletes and Amelia Earhart.
More than 12,000 people entered a lottery for tickets to the parade, which will feature the team atop patriotic floats moving down the Canyon of Heroes in lower Manhattan as spectators throw confetti from surrounding buildings.
While companies may not have shown much interest in the parade, they are clearly interested in star Carli Lloyd. Her agent has repeatedly received more than 200 inquiries from marketers who want to work with the athlete.
That’s good news for Lloyd, who like all other National Women’s Soccer League players, is subject to a $37,800 salary cap, about one 10th of what the average male Major League Soccer player makes in a year.