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.
This post originally appeared on CNBC. Read More at CNBC:
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Don’t Feel Like a Chump When You Close on Your New Mortgage
Mortgage closing costs dropped 7 percent over the past year, falling to $1,847 on a $200,000 loan, according to a new analysis by Bankrate.
Typical closing costs varied by state, ranging from $2,163 in Hawaii to $1,613 in Ohio. You can find the average rate for your state in the table below.
Lenders compete for business, so shopping around with at least three mortgage providers can help you reduce the fees associated with your loan. “Homebuyers have more say over closing costs than they think,” Bankrate Senior Mortgage Analyst Holden Lewis said in a statement.
Even as banks lower their mortgage fees, they’re increasing fees in most other categories, according to MoneyRates.com.
While lower mortgage fees are good news for homebuyers and those refinancing their loans, the average saving amount to just $140. That’s not much relative to the total costs associated with buying a house. The average down payment for homebuyers in the first quarter of 2015 was $57,710, for example.
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The costs don’t stop once the buyers move in. On top of mortgage payments, homeowners face an average of more than $6,000 in additional costs related to their house, including homeowners insurance, property taxes and utilities.
The National Association of Realtors expects home prices to increase 6.5 percent this year to a median $221,900, which would put them at the same level as their 2006 record high.
For buyers, better news than the lower mortgage fees is that rates remain relatively low, falling to 3.98 percent last week, per Freddie Mac.
Closing costs | |||
|---|---|---|---|
| State | Average origination fees | Average third-party fees | Average origination plus third-party fees |
| Alabama | $1,066 | $776 | $1,842 |
| Alaska | $935 | $922 | $1,857 |
| Arizona | $1,208 | $761 | $1,969 |
| Arkansas | $1,057 | $760 | $1,817 |
| California | $937 | $896 | $1,834 |
| Colorado | $1,192 | $719 | $1,910 |
| Connecticut | $1,074 | $960 | $2,033 |
| Delaware | $904 | $924 | $1,828 |
| District of Columbia | $1,077 | $718 | $1,794 |
| Florida | $1,028 | $778 | $1,806 |
| Georgia | $1,058 | $821 | $1,879 |
| Hawaii | $1,033 | $1,130 | $2,163 |
| Idaho | $894 | $788 | $1,682 |
| Illinois | $1,080 | $767 | $1,847 |
| Indiana | $1,067 | $770 | $1,837 |
| Iowa | $1,161 | $762 | $1,923 |
| Kansas | $1,047 | $753 | $1,800 |
| Kentucky | $1,060 | $737 | $1,797 |
| Louisiana | $1,060 | $817 | $1,877 |
| Maine | $897 | $830 | $1,727 |
| Maryland | $1,093 | $742 | $1,835 |
| Massachusetts | $905 | $851 | $1,756 |
| Michigan | $1,072 | $746 | $1,818 |
| Minnesota | $1,067 | $689 | $1,757 |
| Mississippi | $1,046 | $837 | $1,884 |
| Missouri | $1,040 | $792 | $1,833 |
| Montana | $1,062 | $855 | $1,917 |
| Nebraska | $1,047 | $770 | $1,817 |
| Nevada | $1,002 | $848 | $1,850 |
| New Hampshire | $1,084 | $750 | $1,835 |
| New Jersey | $1,181 | $913 | $2,094 |
| New Mexico | $1,076 | $876 | $1,952 |
| New York | $1,032 | $879 | $1,911 |
| North Carolina | $1,036 | $875 | $1,911 |
| North Dakota | $1,045 | $791 | $1,836 |
| Ohio | $933 | $681 | $1,613 |
| Oklahoma | $1,027 | $734 | $1,761 |
| Oregon | $1,080 | $785 | $1,864 |
| Pennsylvania | $1,055 | $678 | $1,733 |
| Rhode Island | $1,093 | $802 | $1,896 |
| South Carolina | $1,058 | $837 | $1,895 |
| South Dakota | $1,055 | $704 | $1,759 |
| Tennessee | $1,033 | $773 | $1,806 |
| Texas | $1,031 | $833 | $1,864 |
| Utah | $909 | $788 | $1,697 |
| Vermont | $1,074 | $862 | $1,936 |
| Virginia | $1,050 | $787 | $1,837 |
| Washington | $1,077 | $824 | $1,901 |
| West Virginia | $1,067 | $904 | $1,971 |
| Wisconsin | $1,047 | $723 | $1,770 |
| Wyoming | $874 | $814 | $1,689 |
| Average | $1,041 | $807 | $1,847 |
Bankrate.com surveyed up to 10 lenders in each state in June 2015 and obtained online Good Faith Estimates for a $200,000 mortgage to buy a single-family home with a 20 percent down payment in a prominent city. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and credit reports. The survey excludes title insurance, title search, taxes, property insurance, association fees, interest and other prepaid items.
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Why Are Nearly 40 Million American Adults Not Using the Internet?
For most of use, the Internet is inescapable. We use the Web for everything from paying bills and writing emails to signing up for health insurance and watching our favorite shows.
However, a surprisingly large number of adults in the U.S. have resisted the siren call of the digital life. According to new data from Pew Research, 15% of the adult U.S. population is not online.
Who makes up this group of Internet naysayers? Here are some highlights:
- Unsurprisingly, adults aged 65 and older make up the largest single age group (39 percent) most likely to say they never go online.
- The higher the level of educational achievement, the greater the likelihood of Internet usage. For adults with less than a high school education, a third do not use the Internet.
- Household income is also a significant factor. Adults in the most affluent households are eight times more likely to use the Internet than adults in households with an income of less than $30,000 per year. Nineteen percent of the non-users cite the high expense of Internet service or owning a computer.
- Americans living in rural areas are twice as likely as individuals in urban or suburban regions to not use the Internet.
- As for race and ethnicity, 20 percent of blacks and 18 percent of Hispanics do not use the Internet, compared with 14 percent of whites and 5 percent of English-speaking Asian-Americans.
- While 34 percent of people who do not use the Internet choose not to, for others it’s not a choice, according to an earlier Pew report.
- Thirty-two percent say the Internet is too complicated or difficult to use.
The Crazy Reason Treasury Department Officials Can’t Get Their Work Done
Treasury Department officials are being driven to distraction these days, but it’s not because of the expiring debt ceiling or other pressing financial controversies.
Instead, loud music from a New Orleans-style street band known as Spread Love has reportedly driven some officials and employees at the Treasury building to wear earphones to block out the noise and even move meetings to other parts of the building to find some peace and quiet.
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“We have to relocate our conference calls,” one Treasury employee told The Washington Post. “We can’t have meetings in that corner of the building anymore. It’s like they’re playing music in the building.”
Members of Spread Love have become fixtures of downtown Washington’s street scene and are collecting generous donations for playing their drums, trombone and other brass instruments. Tourists and other office workers out during their lunch hour appear to love the group, but not so the serious-minded economists and bean counters at the Treasury – especially when the band moves within easy shouting distance at the corner of 15th and G Streets NW.
Treasury Secretary Jack Lew’s staff members aren’t the only ones complaining about the jarring music. Partners and associates at the law firm of Skadden, Arps, Slate, Meagher & Flom find it hard to concentrate on their cases with daily interruptions. It got to the point that the firm dispatched a security guard to offer band members $200 a week if they would play somewhere else. Lonnie Shepard, one of the trombonists, told the newspaper that he laughed at the offer because “We can make that in an hour.”
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Rob Runyan, a spokesperson for the Treasury Department, said that employee complaints have made their way to the office of the assistant secretary for management, Brodi Fontenot, but there really wasn’t much that could be done.
“The band and other street noise are part of the distractions of working in downtown D.C.,” Runyan said in an interview Friday.
Cockroaches, Rats and Mice: These Are the Country’s Most Infested Cities
New York really is the most infested city in the country, at least according to a Bloomberg analysis of Census Bureau data on cockroach, mouse and rat sightings.
The Big Apple doesn’t lead in any of those individual categories. Homes in Tampa, Fla., have the most roaches, and those in Seattle may have the most rats. Philadelphia houses had the most mouse sightings in the country. But when Bloomberg combined all three categories, New York came out with the highest cumulative score.
Perhaps surprising given the economic state of the city, Detroit residents were the least likely to report seeing a mouse, rat or roach.
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The data covered only 25 metro areas, so some large cities like Dallas, Los Angeles and San Francisco don’t appear on the list.
Roaches appear to enjoy nice weather. Nearly 40 percent of homes in Tampa had evidence in roaches in the past year, followed by Houston and Austin. Cities with the fewest roach sightings were Seattle, Minneapolis and Detroit.
Mice, on the other, hand, seem to prefer the northeast. Nearly 20 percent of Philly homes had evidence of mice, followed by Baltimore and Boston. Tampa, Jacksonville, and Las Vegas had the lowest percentage of mouse sightings.
More than 20 percent of homes in Seattle and Austin had rats, with Miami rounding out the top three. Richmond, Va., Hartford, Conn., and Minneapolis had the lowest level of rat sightings.
All those vermin lead to big business. Last year, the U.S. pest control industry generated nearly $7.5 billion in revenue, a 3.5 percent increase year-over-year.
Bloomberg reported that the data also showed a difference in infestation levels of homes with families living below the poverty line and minority families, which were more likely to report evidence of rats and roaches.
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Facebook Is Testing a Solar-Powered Internet-Beaming Drone
Imagine looking up at the sky and seeing a 900 lb. drone the size of Boeing 737 moving in slow circles 11 miles above you. As part of Facebook’s plan to provide Internet access to the 4 billion people who currently lack it, that could soon be the reality for the 10 percent of Earth’s population that lives far from cell towers or fiber optic lines.
Researchers at Facebook’s Connectivity Lab, a division of Facebook’s Internet.org, announced yesterday that the first such drone has been completed as a step toward building a larger fleet. The craft hasn’t been flown yet, but Facebook has been testing versions one-tenth the size over the U.K. and plans on beginning flight tests of the full-size craft before the end of this year.
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The drone, termed Aquila (Latin for “Eagle), is a solar-powered V-shaped carbon fiber craft that will carry equipment such as solar panels and communications gear that can beam down wireless Internet connectivity. Lacking wheels or the ability to climb, the drone will be launched using helium balloons and will be able to fly for 90 days at a time.
One of the biggest breakthroughs in the project has been the team developing a way to increase the data capacity of the lasers involved. The new system allows a ground-based laser to transmit information to a dome on the underside of the plane at 10 GB per second, about 10 times faster than previously thought possible.
Facebook’s mission isn’t without controversy. Worldwide, critics have been questioning many of Internet.org’s practices on privacy, fairness and security grounds. Those opponents fear that users of Internet.org might be monitored through state-run telecoms, in some cases allowing countries to spy on and repress their citizens. In addition, first-time users of the Internet might confuse Facebook for the entire Internet and only receive news and information from the one site.
The flack Internet.org is receiving isn’t the only problem Facebook has to deal with. Rival Google also has a project in the works to bring wireless Internet to rural communities. Their program, called “Project Loon,” involves high-altitude helium balloons that have transmitters attached to them. Although the project hasn’t been launched yet, it’s in more advanced stages than Aquila.
Watch the video from Facebook’s Connectivity Lab: