Dow drops more than 300 in post-Fed selloff

The pan-European FTSEurofirst 300 index was down 0.6 percent by 1144 GMT, while the euro zone’s blue-chip Euro STOXX 50 index weakened 0.9 percent.

Fed Chair Janet Yellen strongly hinted at a gradual tightening of monetary policy after Wednesday’s rate increase and that the pace of further hikes would depend on inflation, which remained firmly below the central bank’s 2 percent target.

Stock prices continued their slide this morning as oil prices continued to fall.

Shares of Dow member Chevron fell 3.1 percent, while oil-services giants Halliburton and Weatherford International fell 4.7 percent and 5.7 percent, respectively, as United States oil prices ended below $35 a barrel on worries about a persistent supply glut.

The dollar index, which measures the greenback against a basket of other major currencies, shed 0.06 per cent at 98.157.

While higher volume and a pick-up in volatility are not unusual on options expiration day, Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas, said Friday’s sell-off appeared to be tied more to the Fed’s move and lower oil prices. The Dow Jones Industrial Average sank 275.59 points, or 1.6 percent, to 17,220.25.

European stocks had rallied on Thursday as investors took the US Federal Reserve’s decision to raise interest rates as a sign of confidence in the world’s biggest economy.

The oil woes helped push US equities lower after rallying on Wednesday, with the S&P energy index down 2.5 percent as the worst performing of the 10 major S&P sectors.

“The market is still continuing to want to migrate toward more defensive, more visible earnings-type companies or sectors”.

The blue-chip index dropped 367.39 points, or 2.1 per cent, to 17128.45, marking its lowest closing level in about two months. The 10-year Treasury yield fell 8 basis points to 2.22% despite the Fed’s interest-rate hike Wednesday.

“I think they will continue to trend as they are right now”, he said.

The selling pressure also came amid a “quadruple witching” Friday, a day when stock and index options and stock and index futures all expire.

The S&P 500 rebounded as much as 13 percent from an August low through early November, before giving up more than 4 percent since then.

The S&P has gained 60.70 points, or 3 percent. About 8.0 billion shares changed hands on United States exchanges, compared with the 7.2 billion daily average for the past 20 trading days, according to Thomson Reuters data. FedEx was up 2.0 per cent at $151.84 after it reported a better-than-expected quarterly profit.