Tel Aviv stock market slumps at opening, following week of losses on US markets

After New York indexes suffer worst week in more than seven years, TASE drops despite delayed start to trading

Screens showing falling stocks at the Tel Aviv Stock Exchange, December 23, 2018 (Miriam Alster/Flash90)
Screens showing falling stocks at the Tel Aviv Stock Exchange, December 23, 2018 (Miriam Alster/Flash90)

The Tel Aviv Stock Exchange (TASE) slumped upon opening Sunday after a delayed start to trading to calm the market in the wake of losses in New York last week, Globes reported.

Sharp falls were seen particularly on companies listed on both local and US exchanges. At time of publication, the Tel Aviv 35 Index was down 5.43 percent and the Tel Aviv 125 Index down 5.08%.

Another day of big losses Friday left the US market with its worst week in more than seven years. All of the major indexes have lost 16% to 26% from their highs this summer and fall. Barring huge gains during the upcoming holiday period, this will be the worst December for stocks since 1931.

There hasn’t been one major shock that has sent stocks plunging. The US economy has been growing since 2009, and most experts think it will keep expanding for now. But it’s likely to do so at a slower pace.

Illustrative: A trader works on the floor of the New York Stock Exchange, July 12, 2016 (Drew Angerer/Getty Images/AFP)

As they look ahead, investors are finding more and more reasons to worry. The US has been locked in a trade dispute with China for nine months. Economies in Europe and China are slowing. And rising interest rates in the US could slow its economy even more.

Dysfunction in Washington isn’t helping the situation, with another Trump administration cabinet member announcing his resignation this week and the government Friday night on the brink of a partial shutdown.

Stocks are now headed for their single worst month since October 2008, when the market was being battered by the global financial crisis.

December is generally the strongest time of the year for US stocks. Traders often talk about a “Santa rally” that adds to the year’s gains as people adjust their portfolios in anticipation of the year to come.

But this year no sector of the market has been spared. Large multi-national companies join smaller domestic ones in their losses. And huge high-tech companies, once the best-performing stocks on the market, are now leading the way lower.

Technology’s huge popularity during the recent boom years made it even more vulnerable as investors’ moods turn sour. Amazon, Facebook, Apple, Netflix, and Google’s parent company, Alphabet, have seen their market values fall by hundreds of billions of dollars.

In this March 29, 2018, file photo, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York’s Times Square.(AP Photo/Richard Drew,)

The Nasdaq composite, which contains a high concentration of tech stocks, has sunk almost 22% from its record high in late August. Several big technology companies, notably Facebook and Twitter, have also suffered as a result of scandals over matters such as data privacy and election meddling, and traders worry that the industry will face greater government regulation that could increase costs and affect their profits.

The major US indexes fell 7%  this week and they’ve sunk more than 12% in December.

Investors around the world have grown increasingly pessimistic about the global economy’s prospects over the next few years. It’s widely expected to slow down, but traders are concerned the cooling might be worse than they previously believed.

After a sharp early gain Friday, the S&P 500 index retreated 50.80 points, or 2.1%, to 2,416.62. The S&P 500, the benchmark for many index funds, has fallen 17.5% from its high in September.

This June 17, 2015 file photo shows traders on the main trading floor the New York Stock Exchange. (AFP/KENA BENTACUR)

The Dow Jones Industrial Average sank 414.23 points, or 1.8%, to 22,445.37. The Nasdaq skidded 195.41 points, or 3%, to 6,332.99. The Russell 2000 index of smaller-company stocks lost 33.92 points, or 2.6%, 1,292.09.

European markets rose slightly and Asian markets were mixed.

The price of oil has also fallen sharply in recent weeks, down 40% from the high it reached in October, amid concerns over a glut in the market and the slowing economy.

On Friday the price of US crude slipped 0.6% to $45.59 a barrel in New York. Brent crude, the standard for international oil prices, fell 1% to $53.82 a barrel in London.

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