Wall Street sell-off not all bad news

The US sharemarkets dived soon after reopening despite the Federal Reserve slashing interest rates 50 basis points (the eighth cut this year) in an effort to reassure investors. In a surprise move, the European Central Bank also cut rates by the same amount.

At close the Dow Jones Industrials Average was down 7.1%, the S&P 500 was down 4.9% and the Nasdaq down 6.8%. While the percentage point drop in the DJIA was not large enough to invoke the circuit-breaker as was feared, it was the largest point drop within one day. Volume of shares traded was a reported 2.3 billion, more than the largest record volume of 2.1 billion (Jan 4 2001).

Today’s sell-off erased US$591.2 billion from the value of US stocks.

It was a broad sell-off affecting most sectors. Major sector activity as follows: