Dow Jones drops more than 200 points, at 2-week lows

US stocks were falling sharply on Tuesday. The Dow Jones was down 240 points or 1.32% at 18,088 while the Nasdaq was falling 1.75%. Most indexes were at the lowest levels in at least two weeks. 

The Dow Jones index bottomed at 18,069 and then rebounded. The index was attempting to trim some losses, but still remained below a short-term uptrend line from September lows. Support levels area seen around 18,050 (Sep 26 & 27 low) and then the psychological 18,000 before 17,900 (Sep low). 

Disappointing earning results affected risk appetite. Alcoa reported earning and its shares were falling 11%. Among the worst performers were also Samsung shares falling more than 8% in the US after the company announced it would discontinue production of its latest smartphone. 

Among yield, the US 10-year climbed to 1.779% and then pulled back, yields were holding around 4-month highs.  Crude oil prices were lower but showing limited losses. The WTI barrel was falling 1.15% still holding above the $50.00 level. Gold prices were practically unchanged hovering around $1255/oz. 

In the currency market, risk aversion boosted the demand for the Japanese yen that rose across the board during the American session. USD/JPY dropped toward 103.00 while GBP/USD approached flash crash lows and bottomed under 1.2100. The pound remained under pressure. 

Regarding monetary policy, Chicago Fed’s President Evans mentioned that a rate hike in December “could be fine.” Tomorrow the FOMC minutes from the September meeting will be released.