Dow dives as Mnuchin bails from Saudi Arabia conference
U.S. stocks fell Thursday as interest rates resume their upward climb and several industrial companies posted disappointing third-quarter results.
An announcement by Treasury Secretary Stephen Mnuchin that he isin Saudi Arabia also seemed to weigh on stocks. The Trump administration has faced scrutiny for plans to send a delegation to the three-day affair, scheduled to begin Oct. 23, following the disappearance and alleged killing of .
Interest rates rose Wednesday afterof its September policy meeting signaled that policy makers expect to continue the hikes amid robust economic growth. That would affect stocks smaller corporate profits and less spending by consumers.
The Dow fell nearly 450 points, or 1.75 percent, while the S&P 500 and Nasdaq also sank sharply.
The Fed has been gradually raising interest rates since the end of 2015 after keeping them near zero following the global financial crisis. Low rates contributed to the U.S. economic recovery and to big gains for stocks over the last decade, as low rates made bonds relatively unappealing.
In an interview with Fox Business Network, President Donald Trump said he views the Fed as his “biggest threat,” criticizing Chairman Jerome Powell and other Fed officials for moving “too fast” to raise interest rates.
Global tensions also weighed on markets. In Europe, central bank President Mario Draghi warned countries against flouting European Union budget rules, a remark Reuters’ reported is aimed at Italy’s plans to increase borrowing.
Stocks have skidded over the last two weeks, and there are signs investors are worried about future economic growth. The S&P 500 has fallen 4 percent in volatile trading since Oct. 3, with technology, industrial and energy companies seeing the biggest declines. Those industries tend to do better when the economy is growing more quickly and consumers and businesses have more money to spend.
The stocks that have held up best include utilities and household product companies, with Americans continuing to consume staple goods like electricity and toilet paper.
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