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US stocks fall sharply in holiday-shortened trading session

A trader speaks on the telephone on the New York Stock Exchange on Dec. 19, 2018. EFE-EPA/ Justin Lane

A trader speaks on the telephone on the New York Stock Exchange on Dec. 19, 2018. EFE-EPA/ Justin Lane

EFE

Share prices fell sharply Monday on Wall Street, with the widely followed Dow Jones industrial average (DJIA) falling 2.91 percent in a shortened Christmas Eve trading session.

All the major stock market indices declined despite efforts over the weekend by Treasury Secretary Steven Mnuchin to calm investors.

The DJIA fell 653.17 points to 21,792.20, while the broader S&P 500 index dropped 65.52 points, or 2.71 percent, to 2,351.10.

The tech-heavy Nasdaq composite index fell 140.08 points, or 2.21 percent, to 6,192.

Investors experienced the worst Christmas Eve in history in a trading session that pushed the S&P 500 into bear market territory and left the DJIA below 22,000.

Traders define a bear market as a drop in share prices of 20 percent or more from the most recent high.

There is considerable nervousness in the markets but also within the White House, where President Donald Trump is blaming Federal Reserve Chairman Jerome Powell for the markets’ precipitous drop in recent weeks.

The Fed chairman has continued raising short-term interest rates and removing liquidity from the economy, sending the markets down after Trump had presumed that during his administration the markets would continue their upward trajectory, repeatedly bragging about - and taking credit for - that situation.

Trump tweeted Monday that “The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!”

Mnuchin spoke by telephone over the weekend with the CEOs of the six major US banks to try and calm markets that have been on the downswing for some days, but his efforts do not seem to have convinced investors if Monday’s trading session is any indication.

Meanwhile, oil continued falling in Monday’s trading session, with the price of West Texas Intermediate (WTI), the US benchmark crude, falling 4.89 percent to $43.36 per barrel.


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