Wall Street sinks as DoubleLine's Gundlach says stocks are in bear market
By April Joyner NEW YORK (Reuters) - Wall Street's major indexes each slid more than 1 percent on Monday on concerns about slowing growth and as DoubleLine Capital's Jeffrey Gundlach suggested that U.S.
By April Joyner
NEW YORK (Reuters) - Wall Street's major indexes each slid more than 1 percent on Monday on concerns about slowing growth and as DoubleLine Capital's Jeffrey Gundlach suggested that U.S. stocks are in a bear market.
Speaking in a CNBC interview, Gundlach, chief executive officer of DoubleLine Capital and known on Wall Street as the Bond King, also said that the Federal Reserve should not raise interest rates. His comments pushed U.S. stocks to session lows.
The S&P 500 Financial sector index <.SPSY> gave up its earlier intraday gains after Gundlach's comments and was last down 0.8 percent, though it still had the lowest percentage decline among the S&P 500's major sectors.
"The markets right now are emotionally drained and are very prone to sell-offs," said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. "It's really about sentiment, and the Gundlach statement didn't help the market."
Gundlach's bearish comments added to investors' skittishness, which had been fanned earlier in the session as the National Association of Home Builders Housing Market Index indicated homebuilder sentiment had fallen to a three-and-a-half-year low.
A profit warning from British retailer ASOS
"Because of the profit warning, there is an overall question of holiday spending," said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
But a dovish statement from the Federal Reserve indicating a slower pace of interest-rate hikes could lift market sentiment, investors said. The Federal Open Market Committee is scheduled to meet on Tuesday and Wednesday.
The Dow Jones Industrial Average <.DJI> fell 446.62 points, or 1.85 percent, to 23,653.89, the S&P 500 <.SPX> lost 48.5 points, or 1.87 percent, to 2,551.45 and the Nasdaq Composite <.IXIC> dropped 137.66 points, or 1.99 percent, to 6,773.00.
The S&P healthcare index <.SPXHC> dropped 2.0 percent after a federal judge late on Friday ruled that the Affordable Care Act, commonly known as Obamacare, was unconstitutional based on its mandate requiring people to buy health insurance.
Shares of insurer UnitedHealth Group Inc
Johnson & Johnson
Goldman Sachs Group Inc
Declining issues outnumbered advancing ones on the NYSE by a 3.92-to-1 ratio; on Nasdaq, a 2.78-to-1 ratio favoured decliners.
The S&P 500 posted one new 52-week high and 108 new lows; the Nasdaq Composite recorded eight new highs and 473 new lows.
(Reporting by April Joyner; additional reporting by Amy Caren Daniel in Bengaluru; editing by Jonathan Oatis)
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