Dow Sinks 400 Points on Christmas Eve After Mnuchin Fails to Tame Investor Worries
Following the worst week of trading since the 2008 financial crisis, the stock market opened sharply lower on Christmas Eve, with the Dow sinking more than 400 points as Wall Street operates on a holiday-shortened session.
It’s been a brutal month for benchmark indexes, as the Dow Jones Industrial Average and the S&P 500 are on track for their worst December since the Great Depression in 1931. Both the S&P and the Nasdaq Composite — the latter now in bear market territory — plunged more than 1.7 percent on Monday morning.
(Trading on the New York Stock Exchange will end at 1 p.m. ET and will remain closed through Christmas Day.)
The drop comes a day after Treasury Secretary Steven Mnuchin’s conference call with the heads of the six largest banks in the United States, including J.P. Morgan Chase, Wells Fargo, Goldman Sachs and Bank of America.
In a statement released Sunday evening, the Treasury Department announced that each of the chief executives confirmed that they have “ample liquidity” to lend to consumers, businesses and other market operations.
“We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business,” Mnuchin said in a statement.
Contributing to the shaky start was a partial shutdown of the federal government, which is expected to continue until Thursday and potentially into January.
Mnuchin sought to temper investor jitters in the Treasury memo, adding: “With the government shutdown, Treasury will have critical employees to maintain its core operations at Fiscal Services, IRS and other critical functions within the department.”
Volatility on Wall Street continued after the Federal Reserve voted last week to raise interest rates to a range of 2.25 to 2.5 percent — the fourth rate hike this year and the ninth since December 2015.
“2018 has been the strongest year since the financial crisis, and during that period, we’ve had low unemployment and strong growth, and inflation has still remained just a touch below 2 percent,” chairman Jerome Powell explained. “I do think that gives the committee the ability to be patient in moving forward.”
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