The Dow Jones industrial average fell more than 300 points to below the index’s 50-day moving average, wiping out gains for the year. The S&P 500 also closed in the red for the year and breached its 50-day moving average, which is an indicator of the market trend. Only the Nasdaq held onto gains of 2.61 percent for the year.
There’s “concern that energy and the strength in the dollar will somehow be negative for the equities,” said Art Hogan, chief market strategist at Wunderlich Securities. He noted that the speed of the dollar’s surge was the greatest market driver, amid mixed economic data and concerns about the Federal Reserve raising interest rates.
The U.S. dollar advanced more than 1 percent to 12-year highs as the euro fell below $1.07 for the first time in nearly 12 years on the beginning of quantitative easing in the euro zone.
The dollar “is getting to very dangerous levels because of the euro,” said Peter Cardillo, chief market economist at Rockwell Global Capital. He added that “we’re probably going to see a short-term top, although not anytime soon.”
“We’re also at psychologically low levels,” he said. “If the S&P closes under 2,050, then perhaps the technical correction may be in full force.”