Sell-off continues after hours — S&P 500 futures now down 6% on the day

on Feb5

S&P 500 futures were trading below the lowest level hit earlier in the stock market during Monday’s wild sell off.

The S&P 500 was down 113 points, or 4.1 percent Monday in its worst day since August, 2011. The futures, which typically match the spot market’s decline, were down even more, off by 5.3 percent as of 4:36 pm ET.

The cash S&P 500, which closed at 2,648, touched 2,638 in afternoon trading, and that is the level traders are watching to see if it can act as support or signal more selling. The S&P futures were down 143 points at 2,611 in late afternoon trading, 27 points below the cash market low.

“It’s definitely volume selling,” said Scott Redler, partner with T3Live.com. He said the action in the futures market could indicate a lower open Tuesday.

A major source of pressure for stocks in the past week has been the bond market, where yields have been spiking with higher inflation expectations. That triggered speculation that the Fed could raise interest rates more than the three times it forecast for this year.

But Treasurys reversed sharply Monday, with morning selling giving way to buying by investors worried about the sharp drop in stock prices. In an unusual and stunning turnaround, the bench mark 10-year Treasury yield plummeted to 2.70 percent from a four-year high of 2.88 percent reached in morning trading.



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