S&P tumbles 3% as US yields soar, investors shun risk; Dow falls 831 points

US stocks tumbled on Wednesday, with the S&P 500 and the Dow marking their biggest daily declines since Feb. 8, and technology stocks were at the centre of the carnage as rising US Treasury yields sent investors fleeing from risky assets.
US long-dated Treasury yields rose again in extension of a trend over the last few weeks fuelled by solid US economic data that reinforced expectations of multiple interest rate hikes over the next 12 months.

Investors also worried about the impact of trade tensions on corporate profits and Hurricane Michael's landfall in Florida adding to the uncertainty.

The Nasdaq registered its biggest daily drop since June 24, 2016, hurt by technology stocks which had their biggest one-day drop since August 2011. The S&P 500 ended the day down 3.3%, representing a 4.95% drop from its Sept. 20 record closing high.

"It's a bit of a blood bath today, clear risk-off action with few places to hide. Gold is up a little bit. The Vix is up more substantially," said Ed Campbell, senior portfolio manager at QMA, the asset management branch of Prudential Financial.

Moody's upgrade: CEA Arvind Subramanian hopes other agencies follow suit

Top government officials today hailed the rating upgrade by Moody's as "long overdue" and hoped others such as S&P and Fitch will follow suit as it presses ahead with steps to ratchet up growth.

The US-based Moody's today upgraded India's sovereign rating after 13 years to Baa2 with a stable outlook, from Baa3 earlier.

"It's a welcome development, but we also feel it was long overdue... it's a recognition of the actions that the government has undertaken like GST, bankruptcy. We also need to keep all these things in perspective," Chief Economic Adviser Arvind Subramanian said.

The government, he said, "is going to do what it has to do on the domestic front -- employment growth, economic growth, reviving investment," he told reporters here.

Asked if he expects other agencies like S&P and Fitch to upgrade, he said: "Let's hope they are not inconsistent amongst each other."

Subramanian had earlier observed that rating agencies follow inconsistent policies while rating India and China.

Economic Affairs Secretary Subhash Chandra Garg said the upgrade is definitely a big vindication of the structural and institutional reforms that India is doing.

"The fiscal deficit consolidation, debt control and all so everything which the government has done in the past couple of years have been recognised. They are projecting a little rise in the trajectory going forward, so they are conscious of the real dynamics of the debt situation. We, of course, remain committed to the fiscal path," Garg said.