Investors lose nerve, and stocks suffer more losses

Shares in Facebook Amazon Apple Netflix and Google’s parent company Alphabet all fell in New York trading

"A sustained rise in rates is probably reflective of improving economic conditions, so that in and of itself isn't necessarily a bad thing for stocks", said Willie Delwiche, investment strategist at Baird in Milwaukee.

The broad-based S&P 500 slumped 3.3 percent to end at 2,786.46, while the tech-rich Nasdaq Composite Index plummeted 4.0 percent to finish the session at 7,427.74. Industrial and internet companies also fell hard. Amazon and Alphabet, respectively the second- and fourth-most valuable US companies, are in what's known as a "correction", a drop of more than 10 percent from a recent peak.

The declines - which brought the major indices to their lowest levels in months - came as US President Donald Trump repeatedly castigated the Federal Reserve for lifting interest rates, sparking worry that the US central bank's independence from politics could be compromised. On Wednesday he said he thought policy makers were "making a mistake" and said the Fed had "gone crazy". The Russell 2000 index of smaller-company stocks shed 37 points, or 2.3 per cent, to 1,584. Esterline climbed 30.6 per cent to $115.97 while TransDigm slipped 2.9 per cent to $341.20. Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.

The Dow Jones industrial average tumbled more than 400 points to just below 26,000 at lows. And if history is any guide, we won't have to endure too much, as the S&P has been up an average of 14.5% a year after all midterm elections going back to 1946, while all 18 midterms saw higher returns 12 months later, he notes.

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Investors appeared to be seeking safety from the market turmoil, bidding up Treasuries and pushing yields down from recent multi-year highs.

US stocks are tumbling for the second consecutive day as the market's recent downturn gets worse.

All three indexes hit records between August 30 and October 3, despite the escalating Sino-US trade dispute gnawing at confidence on corporate profit growth through most of the year. Heating oil fell 1.2 percent to $2.39 a gallon.

Technology and retail companies continued to stumble. Earnings season begins in earnest on Friday with results from JPMorgan Chase and other large banks. It pushed the two-day loss to almost 1,400 points. Microsoft and Alphabet, Google's parent company, held up better than the rest of the market.

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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. After years of big gains, those stocks are now out of favor. Intel dipped 3.76 percent today but that might be viewed lightly when you look at team Red and team Green's day on the market.

The Producer Price Index increased 0.2% in September and reported a 2.6% annual increase. The Nasdaq composite rose 15 points, or 0.2 percent, to 7,436.

The dollar fell to 111.98 yen from 112.59 yen, and the euro rose to $1.1593 from $1.1525.

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