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US share markets drop sharply

Radio New Zealand logo Radio New Zealand 10/10/2018

© Reuters US share markets have had their worst losing session so far this year as rising interest rates and worries about global economic growth sent investors scrambling for safety.

The main Wall Street indices closed 3 percent lower with technology companies such as Amazon, computer chip makers, and luxury goods companies especially hard hit.

The S&P 500 and the Dow Jones Industrial Average fell 3.2 percent and the technology-laden Nasdaq was down 4 percent.

Investment manager Tim Ghriskey, of Inverness Counsel, said a combination of factors was driving markets lower.

"Bonds began to sell off again. The prospect of higher rates concerns investors... Then you have the [mid-term] elections coming up."

American stock markets have set record highs through the year and the correction comes when the US economy has been growing strongly, unemployment is at a 50-year low, but the Federal Reserve has been raising rates to counter inflation pressures.

Rising interest rates are proving attractive for investors to take some profits after Wall Street's record run and turn defensive by buying bonds.

Warnings about the effect of the US-China trade dispute on world growth and company outlooks were also affecting confidence.

The New Zealand share market has fallen for eight days in a row and is at a two-month low.

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