United States stock indexes keep falling as rates resume their climb

The Dow Jones Industrial Average was down by more than 600 points at one point on Wednesday

The Dow Jones Industrial Average was down by more than 600 points at one point on Wednesday

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As long as earnings and the USA economy are continuing to grow, this market pullback will wind up being a healthy dip Alexander said. "The market's starting to say that the glass may be half empty". That hasn't happened since right before the 2016 presidential election. The Nasdaq composite dropped 173, or 2.2 percent, to 7,565.

At 9:59 a.m. ET the Dow Jones Industrial Average was down 202.46 points, or 0.77 percent, at 26,228.11, the S&P 500 was down 27.02 points, or 0.94 percent, at 2,853.32 and the Nasdaq Composite was down 129.45 points, or 1.67 percent, at 7,608.57.

Augustine added that with earnings due out from big banks JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) on Friday morning, investors will look for new market sectors to take the lead from tech stocks. Stocks had come close to big drops in the last few days, but each time they recovered some of their losses. In 1987, stocks dropped more than 20 percent on a single day-Black Monday, Oct. 19-after a strong rally crashed into the Persian Gulf turmoil and trade deficits.

Wall Street got walloped Wednesday as the Dow Jones industrial average suffered its worst day since February.

The tech sector was hit hardest, with Netflix down almost 7 per cent, Amazon down 5 per cent and Apple, Google and Facebook all down more than 3 per cent. Amazon skidded 6.2 per cent to US$1755.25. Technology stocks fell especially sharply.

Microsoft lost 1.4 per cent in early trading Wednesday and 3M gave up 1.6 per cent.

Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 miles per hour. Berkshire Hathaway dipped 4.7 per cent to US$213.10 and reinsurer Everest Re slid 5.1 per cent to US$217.73.

Luxury retailers tumbled after LVMH, the parent of Louis Vuitton, said its sales growth in China slowed.

Bond yields and therefore interest rates have been rising for more than two years as the USA economy grew strong.

Stock prices have been hurt by rising interest rates, which have boosted Treasury yields over the last week. But eventually the high rates worry stock investors, as higher rates tend to increase borrowing costs and cut into profit margins.

A surge in Treasury yields appears to be fueling the losses, as the 10-year U.S. Treasury note spiked last month and has continued to climb throughout October. It was at just 3.05% early last week and 2.82% in late August.

Technology and internet-based companies are known for their high profit margins, and many have reported explosive growth in recent years, with corresponding gains in their stock prices.

Grant Williamson, a client adviser at broker Hamilton Hindin Greene, said another turbulent day on Wall St was always likely to have an impact on the local market.

"It's a risk-off environment as investors are focusing on spiking yields and taking profits off the table as they are concerned about whether the bull market is actually coming to an end", said Ryan Nauman, market strategist at Informa Financial Intelligence.

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