Dow drops more than 500 points on weak bellwethers

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US stocks bounced back on Thursday morning thanks to bargain-hunting on Wall Street after both the Dow Jones Industrial Index and the S&P 500 plummeted on Wednesday and wiped out their 2018 gains.

Nearly 60 percent of the 2,767 stocks in MSCI's global equity index are now in so-called "bear market" territory - down 20 percent or more from their most recent peaks.

The big four banks were down about two and a half per cent each, while Macquarie Group was down 3.2 per cent. Investors have grown tired of chasing capital growth or the next "unicorn", favouring instead the safe returns in cash and fixed income, which at over 2 per cent if using Libor as a crude benchmark, outstrips the yield delivered on much of the stocks on the NASDAQ. Natural gas declined 1.4 percent to $3.17 per 1,000 cubic feet. USA -traded shares of WPP fell 17.5 percent to $57.75.

The dive in formerly high-flying tech stocks sent investors scampering to the safety of sovereign bonds, with yields in 10-year Treasuries falling the most since May to 3.11 percent.

Traders bid up shares in McDonald's after the fast-food chain reported third-quarter results that topped analysts' forecasts. Netflix gave back 9.4 percent and Amazon dropped 5.9 percent.

Shares in iRobot plunged 12.3 percent to $80.49 after the robotics technology company said tariffs will reduce its profitability in the fourth quarter. The benchmark index has lost 7.22 percent from its record closing high.

Things are calming down in the market today, and although there is a lot of uncertainty because of trade policy and interest rate adjustments the hope is corporations still continue with business as usual until there is a strong reason not to.

Rising rates and the trade dispute could both impair economic growth, and some encouraging economic news helped stabilize markets.

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Resources fell further, with giants BHP and Rio Tinto shedding 2.99 and 2.97 per cent respectively, and Fortescue Metals losing 4.4 per cent after reporting a fall in first-quarter iron ore shipments.

USA stocks have gained, as strong corporate earnings, including from software company Microsoft and automaker Ford, helped ease nerves following a steep sell-off in the prior session.

Benchmark U.S. crude fell 4.4 percent to $66.33 per barrel in NY. Brent crude fell 76 cents to $75.68 a barrel, while U.S. crude dropped 40 cents to $66.42. It was last up 0.1 percent at $1.1407.

The broader All Ordinaries index had risen slightly to 5,780 points. Helped by tax cuts, the economy expanded at a 4.2 percent annual pace from April through June, fastest in almost four years.

CURRENCIES: The dollar weakened to 112.42 yen from 112.47 yen on Tuesday. The plan expands its targeted deficit to 2.4 percent of GDP next year, three times more than promised by the previous government. Australia's S&P-ASX 200 dipped 1.1 percent.

In Europe: Stoxx 50 +1.1% FTSE +0.6% CAC +1.6% DAX +1%. The euro rose to Dollars 1.1412 from USD 1.1393.

The Dow lost 125 points, or 0.5 percent, to 25,191.

The MSCI Asia Pacific Index fell 2.1 per cent at 9.34am in Hong Kong, taking its slide from a January peak to 22 per cent. Japan's Topix index plunged 2.9 per cent, heading for its lowest close since September 2017, while the Nikkei 225 Stock Average lost 3.5 per cent.

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