Stock sell-off intensifies, Nasdaq dips to bear market levels and the Dow plunges 650 points

U.S. stocks slid, extending Wednesday’s losses following a Federal Reserve decision and commentary that failed to placate markets.

The S&P 500 (^GSPC) fell 2.49%, or 61.31 points, as of 2:14 p.m. ET. The Dow (^DJI) declined 2.82%, or 658.88 points. The Nasdaq (^IXIC) fell 2.63%, or 171.9 points. The tech-heavy index dipped into bear market territory at the lows of the session, or to a level more than 20% below its recent closing high of 8,109.69 points on August 29.

The sell-off accelerated as the U.S. Justice Department on Thursday announced charges against two Chinese nationals, alleging their involvement in a global hacking campaign to steal tech company secrets, intellectual property and personal data of thousands of members of the U.S. Navy. Prosecutors allege that the individuals operated in conjunction with the Chinese Ministry of State Security’s Tianjin State Security Bureau. The charges come amid an escalating trade war between China and the U.S.

RELATED: Products directly hit by Trump's tariffs on Chinese goods

60 PHOTOS
Products directly hit by Trump's tariffs on Chinese goods
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Products directly hit by Trump's tariffs on Chinese goods
Meat: pork; beef intestine; rabbit meat; venison; frog legs
Fish and seafood:live fish including ornamental fish, trout, eels, tuna, and carp; chilled or frozen meat of various types of trout, salmon, halibut, plaice, sole, albacore, tuna, herring, mackerel, cobia, swordfish, pollack, whiting, catfish, rays, and more; various types of salted or smoked fish; other seafood including various types of lobsters, crabs, shrimps, prawns, oysters, scallops, mussels, clams, squid, octopus, conchs, abalone, sea cucumbers, and sea urchins.
Non-meat animal products such as eggs and dairy:Whey products; butter; various types of eggs including chicken; honey; hair of animals including human, hog, horse and badger; animal intestines, bladders; feathers; bones including shells, beaks, corals, hooves, antlers, and more.
Vegetables:onions; garlic; cauliflower and broccoli; cabbage; carrots; turnips; radishes; beats; cucumbers; peas of various types; beans; lentils; celery; mushrooms; peppers of various types; squash; okra; sweet corn; potatoes; sweet potatoes and yams; some types of tomatoes; spinach; Brussels sprouts.
Fruit and Nuts: Coconuts; cashews; almonds; hazelnuts; walnuts; chestnuts; pistachios; macadamia nuts; pecans; dates; figs; pineapples; guavas; oranges; mandarins; clementines; raisins; grapes; apples; pears; quinces; peaches; berries including strawberries, raspberries, cranberries, blueberries and others; bananas; a variety of dried fruits; peels of various fruits.
Cereals: wheat, including durum wheat; barley; oats; corn; various types of rice; grain sorghum; buckwheat; quinoa; and more.
Mill products: flours including those form wheat, corn, buckwheat, rice, rye, other cereals, potatoes, and bananas; groats and meal of various types including wheat, corn, oats, and rice; malt; starches of wheat, corn, potato, and more
Oil seeds: soybeans; seeds of sunflower, flax seed, sesame, mustard, poppy and more; planting seeds for certain crops; cocoas and mint leaves; and seaweeds.
Sugars and candies: cane sugar; candies with no cocoa
Breads and Pasta: uncooked pasta; various breads, pastries, cakes, and biscuits.
Prepared vegetables and fruits: various vegetables and fruits previously listen in their prepared or preserved forms; various fruit jams including strawberry, pineapple, apricot, and more; peanut butter; various fruit juices including orange, pineapple, lime, grape, apple, and more.
Other food items: soy sauce; condiments and seasonings; protein concentrates.
Beverages and vinegars: water, including mineral water; fruit or vegetable juices and juice mixes; beer from malt; wine, including rice wine; ethyl alcohol; vinegars
Food processing waste and animal feed: brans from processing; oil cakes; dog or cat food; animal feed
Tobacco products: various types and preparations of tobacco; tobacco refuse; cigars; cigarettes; smoking tobacco
Salts and minerals: salt/sodium chloride; sulfur; graphite; quartz; types of clays; chalk; slate; marble; granite; sandstone; dolomite; gypsum; some plasters; some types of cement; mica; Epsom salts
Ores, slag, and ash: ores of iron, copper, nickel, cobalt, aluminum, lead, zinc, tin, chromium, tungsten, uranium, titanium, silver, other precious metals, and others; slag, various types of ash.
Mineral fuels and oils: coal; lignite; peat; coke; tars; various types of light oil; various types of kerosene; petroleum oils; liquefied fuels including natural gas, propane, butane, ethylene, and petroleum; oil shale and tar sands
Inorganic Chemicals: chemicals such as chlorine, sulfur; carbon, nitrogen, oxygen, and silicon; acids including sulfuric, nitric, and more; various types of fluorides, chlorides, sulfates, nitrates, carbonates, and more.
Organic chemicals
Fertilizers: animal or vegetable fertilizers; urea; ammonium sulfate; sodium nitrate; and more.
Tanning and drying extracts, dyes, and paints
Essential oils, perfumes: perfume; lip or eye make up preparations; manicure or pedicure products; shampoo; hairspray; bath salts.
Soaps and cleaning products: various types of soap; leather and textile treatments; polishes for shoes and furniture.
Glues, adhesives, and enzymes
Cigarette lighter fluid
Photographic goods: various types of photo plates; instant film; various types of film in rolls; various types of motion picture film.
Various chemical products: pesticides; herbicides; fungicides
Plastics: vinyl flooring and other plastic floor and wall coverings; sausage casings; bags; gloves including baseball gloves; rain jackets; machinery belts.
Rubber: latex; rods, tubes, and other products; conveyor belts; various types of transmission belts; various types of pneumatic tires; gloves; gaskets; dock fenders.
Raw hides and leather: animal skins including cow, buffalo, sheep, goats, reptile; various types of leather made from cow, buffalo, sheep, goats, reptile; leather trunks and suitcases; leather handbags; CD cases; gloves including ski, ice hockey, and typical use; belts; fur clothing, incluidng artificial fur.
Wood: fuel wood; charcoal; various types of wood including oak, beech, maple, ash and cherry; moldings; rods; particleboard; various types of plywood; doors; corks and stoppers; wicker and bamboo baskets.
Wood pulp products
Paper: Newsprint; writing paper; vegetable parchment; carbon paper; self-adhesive paper; cigarette paper; envelopes; tablecloths; handkerchiefs; folders.
Silk
Wool or animal hair products: cashmere; yarns; tapestries and upholstery.
Cotton: fibers; thread; yarn; denim; satin.
Flax: yarn; fabrics
Man-made textiles: polypropylene; rayon; nylon; polyester
Other textile products, rope, twine: hammocks; fish nets; carpets;
Fabrics: corduroy; gauze; terry towel; lace; badges; embroidery
Headgear: caps; hairnets; wool hats; head bands
Stone, plaster, cement, asbestos: stone for art; marble slabs; roofing slate; millstones; sandpaper; floor or wall tiles; cement bricks.
Ceramics: fire bricks; pipes; tiles; porcelain and china.
Glass and glassware: balls; rods; drawn or blown glass; float glass; tempered safety glass; mirrors; carboys, bottles, jars, pots, flasks, and other containers; microscope slides; woven fiberglass
Precious stones and pearls: industrial diamonds; silver and products made of silver; gold and products made of gold; platinum; palladium.
Iron and steel and products derived from the metals:drums; tubes; pipes; doors; windows; screws; horseshoes;
Copper: plates; cables; tubes; pipes; springs
Nickel: bars; rods; wires
Aluminum:powder; cable; wire; screws.
Various metal products, tools, cutlery: industrial items made from lead, zinc, tin, and more; saw blades; bolt cutters; hammers; wrenches; crow bars.
Machinery, both industrial and retail: steam turbines; engines; fuel-injection pumps; air compressors; air conditioning machines; refrigerators; cream separators; hydraulic jacks; escalators; manure spreaders; copiers; automatic beverage-vending machines
Electronics: vacuum cleaners; hair clippers; spark plugs; generators; bicycle lights; electric amps; television cameras; various types of TVs; video projectors.
Vehicles and parts: axles; driving shafts; gear boxes; radiators.
Parachutes

Ships and boats: sailboats; motorboats; canoes; yachts.

Instruments for scientific or medical purposes: microscopes; cameras for non-art purposes; gauges for pressure, electrical currents, and more.
Clocks and watches
Furniture, bedding, mattresses: car seats; wood chairs; furniture designed for offices, kitchens, and more; mattresses; chandeliers; lamps.

Assorted items: buttons; stamps; paintings; collections of zoological, botanical, mineralogical, anatomical, historical, archaeological interest; antiques of an age exceeding one hundred years

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Later in the day, stocks continued to move lower after the U.S. House of Representatives Speaker Paul Ryan said that President Donald Trump would not sign a Senate funding resolution to prevent a partial government shutdown this weekend.

Stocks began their descent Wednesday after Federal Reserve officials announced their decision to raise the benchmark interest rate 25 basis points to between 2.25% and 2.5%, increasing the cost of borrowing money and affecting rates for home mortgages, credit cards and auto loans. But the Fed’s dot plot for next year now points to a median of two rate hikes in 2019, from three previously. Federal Reserve Chairman Jerome Powell signaled that the Fed has now arrived at the lower end of the neutral rate range, or a level which would neither overly stimulate nor slow the economy.

“Yesterday, there is no doubt that markets were expecting a bailout from the Fed – and threw a tantrum when they didn’t get it,” Brad McMillan, chief investment officer for Commonwealth Financial Network, wrote in a note Thursday.

The expected bailout the markets sought was for the Fed to raise rates at this meeting, which it did, but also that the Fed would signal that future rate increases were less likely. 

Instead, Powell and the FOMC “indicated that they will probably hike rates only twice next year – but will keep raising rates,” McMillan said, with emphasis his. “By pretty much ignoring the recent financial market turmoil and focusing on continued economic strength, Powell put the markets on notice that the Fed will be much less willing to shape monetary policy in order to support asset prices.” 

RELATED: Every retailer who filed for bankruptcy in 2018

17 PHOTOS
Every retailer who filed for bankruptcy in 2018
See Gallery
Every retailer who filed for bankruptcy in 2018

A'gaci

Women's apparel and accessories retailer A'Gaci filed for Chapter 11 bankruptcy in January. 

Photo credit: Getty

Kiko USA

Cosmetics retailer Kiko USA Inc filed for Chapter 11 bankruptcy protection in January.

Photo credit: Getty

Tops Markets

Tops Markets operates 174 supermarkets — called Tops Friendly Markets. The company filed for bankruptcy protection in February.

Photo credit: Getty

The Bon-Ton Stores

The Bon-Ton Stores owns multiple department store chains including Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's, and Younkers. The company filed for bankruptcy in February.

Photo credit: Getty

Remington Outdoor

Remington filed for Chapter 11 bankruptcy protection in March.

Photo credit: Getty

The Walking Company

The shoe seller The Walking Company, which operates 208 stores in the US, filed for Chapter 11 bankruptcy protection in March.

Photo credit: Getty

Claire's

The jewelry chain Claire's filed for bankruptcy in March.

Photo credit: Getty

Southeastern Grocers

Southeastern Grocers, the parent company of the grocery chains Winn-Dixie, Harveys and Bi-Lo, filed for Chapter 11 bankruptcy protection in March.

Photo credit: AOL

Nine West

Nine West Holdings filed for bankruptcy in April.

Photo credit: Getty

Bertucci's

Italian casual-dining chain Bertucci's filed for Chapter 11 bankruptcy protection in April.

Photo credit: AOL

Rockport

The footwear brand filed for Chapter 11 bankruptcy protection in May.

Photo credit: Getty

National Stores

The owner of the Fallas chain of discount stores filed for bankruptcy in August.

Photo credit: Facebook

Brookstone

Brookstone filed for Chapter 11 bankruptcy protection in August.

Photo credit: Getty

Samuels Jewelers

Samuels Jewelers filed for Chapter 11 with an agreement for bankruptcy financing in August.

Photo credit: Facebook

Toys R Us

Toys R Us filed for bankruptcy in September.

Photo credit: Getty

Mattress Firm

Mattress Firm filed for bankruptcy in October.

Photo credit: PA

Sears

Sears filed for bankruptcy in October.

Photo credit: PA

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Other analysts noted that Fed officials’ outlooks have taken on a slightly darker tone since delivering their last statement.

“Powell’s press conference, while remaining upbeat, highlighted some dark clouds on the horizon: growth in other economies has moderated, and financial conditions have become less supportive of growth,” JPMorgan analyst Michael Feroli wrote in a note.

Feroli said Powell’s statements came across as “generally more dovish” than the FOMC statement. But he added that one area where Powell “firmly batted down expectations of a dovish turn was balance sheet normalization: he dismissed any idea that they were contemplating using the balance sheet to respond to incoming data.”

Powell said during Wednesday’s press conference that the central bank would continue shrinking its balance sheet at the current rate, allowing $50 billion worth of bonds the Fed had purchased to stimulate the economy during and after the financial crisis to run off per month. Earlier this week, President Donald Trump implored the Fed to freeze this action, tweeting: “Stop with the 50 B’s.”

Yields for bonds on the long end of the yield curve continued to decline Thursday. The yield on the 10-year Treasury note fell less than 1 basis point to 2.771%, narrowing its spread with the 2-year note to 10.3 basis points as of 1:08 p.m. ET. The yield on the 30-year Treasury note fell 3.2 basis points to 2.981%.

Altria (MO) announced Thursday that it sealed a $12.8 billion investment in Juul, taking a 35% stake in the e-cigarette company valued at $38 billion. Altria, which makes Marlboro cigarettes, said it will provide Juul with shelf space and access to Altria’s customers, as well as access to the company’s about 230,000 retail locations. S&P Global Ratings downgraded Altria’s issuer credit and issue-level ratings on unsecured debt to BBB from A- following the investment, while stating that the outlook remains stable. S&P noted that the stake in Juul, along with the previously announced investment in Cronos (CRON), will produce a debt-to-EBITDA ratio slightly under 3x for Altria. Shares of Altria fell 2.79% to $49.97 each as of 1:06 p.m. ET.

AB InBev (BUD), the maker of Budweiser and the world’s largest beer brewer, said Wednesday that it is partnering with Canadian cannabis company Tilray (TLRY) to research cannabis-infused drinks. The companies said they will invest a combined $100 million to research non-alcoholic drinks containing tetrahydrocannabinol, or THC, and cannabidiol, or CBD. Shares Tilray rose 8.31% to $76.90 each as of 1:07 p.m. ET, while shares of AB InBev fell along with the broader market by 1.69% to $67.64 each.

Walgreens Boots Alliance (WBA) delivered quarterly adjusted earnings that beat analyst expectations. However, the stock fell after the company said it will be aggressively cutting costs in a plan to save $1 billion per year within three years, which will lead to restructuring and other charges. Same-store retail sales for consumer items including toiletries and cosmetics fell 3.2% in the quarter, which Walgreens said was due to de-emphasizing certain products including tobacco. Shares of Walgreens fell 6.19% to $68.75 each as of 1:07 p.m. ET.

Conagra (CAG), which houses brands including Marie Callender’s,Gardein and Slim Jim, reported quarterly net sales of $2.38 billion, missing estimates of $2.41 billion. However, the company beat estimates for earnings per share from continuing operations, delivering 67 cents per share versus 56 cents anticipated. But the packaged food company said it sees adjusted EPS for the full year of between $2.03 to $2.08, where the consensus estimate had called for $2.13 per share. Conagra’s stock fell 14.61% to $24.84 per share as of 1:07 p.m. ET.

Initial jobless claims in the U.S. rose to a seasonally adjusted 214,000 for the week ending December 15, the Department of Labor said in its weekly statement Thursday. This represented an increase of 8,000 from the previous week’s level of 206,000, a level that had neared a 49-year low. Consensus economist expectations had called for initial jobless claims to register at 215,000 for the week ending December 15.

Continuing claims rose to 1.688 million for the week, higher than the 1.661 million from the week prior and the 1.663 million expected.

The Conference Board’s Leading Economic Index rose 0.2% in November, outpacing expectations of a flat reading. This follows a downwardly revised 0.3% decline in October. The LEI comprises components including average weekly hours, unemployment insurance claims, new orders, building permits, stock prices and interest rate spreads.

“The LEI increased slightly in November, but its overall pace of improvement has slowed in the last two months,” Ataman Ozyildirim, director of economic research at The Conference Board, said in a statement. “Despite the recent volatility in stock prices, the strengths among the leading indicators have been widespread. Solid GDP growth at about 2.8% should continue in early 2019, but the LEI suggests the economy is likely to moderate further in the second half of 2019.”

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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