FRENETIC trading on October 24th ended with America’s leading share-price indices giving up most if not all of the gains of what, only a month ago, had been a good, if not spectacular, year. Expectations had hovered between positive and very positive, and these had hitherto appeared to be borne out by strong third-quarter earnings. The markets regained some ground on the morning of October 25th. But signs of impending problems are clearly attracting investors’ attention.
The recent fall has been broad, cutting across most industries. Homebuilders’ share prices peaked early in the year. They have not been helped by a report from the Department of Commerce showing a protracted decline in housing sales. That may have affected other sectors. Separately, optimism that President Donald Trump’s administration will strike a speedy trade deal with China, as it did with Canada and Mexico, is fast fading. Construction and farm-machinery companies took a hit on October 24th: Caterpillar’s share price fell by 6% and John Deere’s by 4%. Carmakers have been hurt too, with the share prices of General Motors and Ford slipping by 5%. The sell-off was particularly severe for speculative companies—such as ones in biotech—with the share prices of many sliding by more than 10%.
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