STOCKS SMASHED: Dow tumbles 666 points in worst points decline since October 2008

Photo: Matt Cardy/ Getty Images.
  • US equity markets got slammed, with the Dow Jones industrial average closing down more than 600 points, a decline of 2.5%.
  • Tech stocks reported mostly disappointing earnings.
  • Job numbers were good, but may be too good for some economists.
  • Oil prices slid.
  • The Australian dollar fell to its lowest level in weeks and ASX futures tumbled.

The Dow Jones industrial average closed down 666 points in its biggest point decline since October 2008, when the Troubled Asset Relief Program didn’t pass, according to Bespoke Investment Group. Its 2.56% decline was the biggest percentage slide since Brexit.

The big drop came after some of the largest companies in the world reported disappointing earnings for the holiday quarter. Of the mega-cap tech stocks that reported this week, only Amazon had a solid quarter, as Apple, Facebook, Google, and Microsoft all had blemishes in their reports.

The Labor Department reported strong numbers on Friday, as the US economy added 200,000 jobs when economists were predicting 180,000. Average hourly earnings rose 2.9% year-over-year, the largest since the recession. That led some economists to wonder if the labor market is overheating.

The strong wages and job growth numbers ran the 10-year yield up to 2.85%, its highest in four years. It also caused Wall Street economists to strengthen their predictions of three rate hikes from the Federal Reserve this year. The hikes would be one way for the Fed to try and pour cold water on a red-hot market.

The Australian dollar, seen as a proxy for risk appetite on global markets, fell more than 1% in overnight trade, closing at 0.7929. Australian equities futures are also weaker, with the SPI futures pricing pointing to steep declines in Australia when the market opens on Monday.

The price of West Texas Intermediate crude oil was in decline on Friday as well, pulling back toward the $65 mark it crossed in January. The 0.5% decline in the price of oil followed a rare earnings miss from Exxon, which fell 6.66%. The oil company missed on earnings and revenue expectations, which has happened only three other times in the last four years.

Read more about the jobs report here.

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