December 10, 2018

Dow slides 500 points on Brexit drama, bank selloff

Brexit chaos and sinking bank stocks are combining to deal the stock market another blow.

The Dow fell 500 points, or 1.9%, on Monday. The index tumbled below the 24,000 level. The S&P 500 retreated 1.7%, while the Nasdaq lost 1%.

US stocks hit session lows after Prime Minister Theresa May said she would delay a crucial vote on her Brexit deal. The British pound extended its losses, plunging 1.6% against the US dollar. Sterling is on track for its worst close since April 2017.

"We seem to have taken a turn for the worse because of the Brexit news," said Mark Luschini, chief investment strategist at Janney Capital. "Any news that isn't good is immediately treated as terrible."

The Brexit chaos reinforces one of Wall Street's biggest fears: slowing global growth. Germany and Japan are already in economic contraction, while China's economy has suffered from a wave of tariffs.

FTSE 100 was down 0.4%. The FTSE 250, which has more companies focused on doing business in the UK, dropped 1.6%.

"The big worry is economic growth," said David Joy, chief market strategist at Ameriprise Financial. "Nobody knows what to make of the trade situation."

Concerns about growth and fluctuations in the bond market have slammed bank stocks. The S&P 500 banking sector led the way lower on Monday, building on last week's steep losses. Bank of America, Citigroup and Wells Fargo lost more than 3% apiece.

Apple also fell sharply after Qualcomm was granted an injunction against the iPhone maker in China.

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