Financial Markets                      11/20 15:29

   

   NEW YORK (AP) -- Jarring swings keep rocking Wall Street, and U.S. stocks 
erased a big morning gain to drop on Thursday as the market remains skittish 
following weeks of doubts and erratic moves.

   After initially soaring toward what seemed like its best day since May, with 
an early surge of 1.9%, the S&P 500 erased all of it and fell 1.6%. The Dow 
Jones Industrial Average dropped 386 points, or 0.8%, and the Nasdaq composite 
sank 2.2%.

   The sharpest losses again hit what used to be the market's biggest winners. 
Nvidia, cryptocurrencies and other areas that had soared with nearly relentless 
momentum, as traders feared missing out on more gains, forced the market lower. 
Bitcoin dropped below $87,000, down from nearly $125,000 last month.

   The market had been shaky coming into Thursday, largely because of twin 
worries: Nvidia and other superstar stocks caught up in the frenzy around 
artificial-intelligence technology may have simply shot too high, and the 
Federal Reserve may be done delivering the invigorating cuts to interest rates 
that Wall Street loves.

   Nvidia initially appeared to tamp down the worries about a bubble for AI 
stocks after reporting a big profit for the summer, along with a forecast for 
coming revenue that easily cleared analysts' expectations. By delivering strong 
profits and indicating more are coming, Nvidia can justify its stock's price 
gains and make it look less expensive.

   Given Nvidia's forecasts, "it is very hard to see how this stock does not 
keep moving higher from here," according to analysts at UBS led by Timothy 
Arcuri. They also said "the AI infrastructure tide is still rising so fast that 
all boats will be lifted."

   Nvidia jumped to an early gain of 5% but then dropped to a loss of 3%. 
Because it's the biggest company in the U.S. market by value, Nvidia's stock 
has more pull on the S&P 500 than any other company's.

   Despite Nvidia's big numbers, worries about a potential AI bubble aren't 
gone. The concern among investors is that all the dollars pouring into AI chips 
and data centers may not ultimately produce the big profits and productivity 
for the economy that proponents have been promising.

   Yes, Nvidia expects to sell another $65 billion of chips in the coming three 
months, which is more than analysts expected. But will all those chips actually 
create much bigger profits for Amazon and other companies using them? That 
question -- whether all the investment in AI will prove to be worth it in the 
end -- is still unanswered.

   The most recent survey of global fund managers by Bank of America showed a 
record percentage of investors saying companies are "overinvesting."

   Amazon went from an early gain of 2.1% Thursday to a loss of 2.5%. Palantir 
Technologies swung from a jump of 5.5% to a loss of 5.8%.

   The last time the overall stock market had swings in one day as wild as 
Thursday's was in April, when President Donald Trump shocked the world with his 
stiff "Liberation Day" tariffs.

   For the second worry that's been dogging Wall Street, interest rates, 
Thursday's jobs report from the U.S. government came in mixed and offered some 
relief. Financial markets initially seemed to pick the data apart for 
encouraging signals, according to Seema Shah, chief global strategist at 
Principal Asset Management.

   The report showed hiring by U.S. employers was stronger in September than 
economists expected, which may suggest the economy remains solid. But it also 
said the unemployment rate worsened slightly, which could give the Fed reason 
to cut its main interest rate at its next meeting in December.

   Traders still see a December rate cut as relatively unlikely, giving it a 
roughly 40% probability, according to data from CME Group. But that's better 
than the 30% chance they saw a day earlier.

   What the Fed does is critical for the stock market because prices ran to 
records in part because of expectations for continued cuts to rates. The Fed 
has already cut rates twice this year to shore up the slowing job market. But 
lower rates can worsen inflation, which has stubbornly remained above the Fed's 
2% target.

   On the winning side of Wall Street was Walmart, which rallied 6.5% after the 
retailer delivered another standout quarter. It reported strong sales and 
profits that blew past Wall Street expectations as it continues to lure 
cash-strapped Americans nervous about the economy and prices.

   That wasn't enough to drown out the losses for Nvidia and tech. Companies 
enmeshed in the crypto industry also tumbled, as bitcoin dropped to its lowest 
price since April. Robinhood Markets fell 10.1%, and Coinbase Global sank 7.4%.

   All told, the S&P 500 fell 103.40 points to 6,538.76. The Dow Jones 
Industrial Average dropped 386.51 to 45,752.26, and the Nasdaq composite sank 
486.18 to 22,078.05.

   In the bond market, the yield on the 10-year Treasury eased to 4.09% from 
4.13% late Wednesday.

   In stock markets abroad, indexes rose across much of Europe and Asia.

   Japan's Nikkei 225 jumped 2.6%, and South Korea's Kospi rose 1.9% for two of 
the bigger gains.

   ___

   AP Writers Teresa Cerojano and Matt Ott contributed.

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