Today was the day that The Street finally got it.  All the great news of the past several weeks finally sunk in that the likelihood of a Fed rate hike is right around the corner, thus creating the mild meltdown all the smart money's been expecting with a resultant crash amounting to 180 points on the Dow.  But as today's resident expert stated -- a sentiment shared by most economists -- with the Fed making its first rate hike in years, "ultimately stocks will thrive because it will prove the U.S. economy is healthy enough to stand on its own."  88 percent of Q3 reports are in now and there is once again a substantial revision to dire Q3 profits predictions.  These forecasts started at nearly a minus 5% in September and have been steadily revised week by week in a positive direction.  Today the latest revision is a minus 0.9 percent.  It's very likely it will be zero or positive by December.  At 7.1 billion, volume was just about exactly in line with recent averages.

Markets | Mon Nov 9, 2015 6:40pm EST

Wall St. indexes drop 1 percent as rate hike looms

BY NOEL RANDEWICH

DJ:  17,730.48  -179.85      NAS:  5,095.30  -51.82          S&P:  2,078.58  -20.62

(Reuters)  The S&P 500 index suffered its worst loss in six weeks on Monday as Wall Street braced for an interest-rate hike and fretted about weak Chinese trade data.

Nine of the 10 major S&P sectors ended lower, led by consumer discretionary and energy stocks. The Dow Jones industrial average slipped back into negative territory for the year, with only two of its 30 components higher on the day.

U.S. companies face the prospect of higher borrowing costs if the Federal Reserve raises interest rates next month, as is widely expected after Friday's strong jobs report.

"There are short-term myopic concerns about a Fed rate hike,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa.

"Bond and stock prices will decline when the Fed makes that first announcement, but ultimately, stocks will thrive because it will prove the U.S. economy is healthy enough to stand on its own," Dollarhide said.

Investors also focused on renewed fears of a slowdown in China, a key market for many companies, ahead of the crucial holiday shopping season.

China, one of the United States' top trade partners, ended October with a record high trade surplus, with both exports and imports falling.

All three major U.S. stock indexes trimmed some of their losses late in the session.

The Dow Jones industrial average .DJI ended down 1.0 percent at 17,730.48 points and the S&P 500 .SPX lost 0.98 percent, to 2,078.58. The Nasdaq Composite .IXIC dropped 1.01 percent to 5,095.30.

The CBOE Volatility index .VIX, known Wall Street's fear gauge, rose 15 percent to 16.52, the most in a single session in six weeks.

Following a dramatic selloff in August, fueled by fears about a slowing Chinese economy, and then a recovery in October, helped by not-so-bad corporate report cards, the S&P 500 remains up 0.99 percent for the year while the Dow is down 0.52 percent.

With 88 percent of S&P 500 companies having posted their third-quarter results, earnings appear to have dipped 0.9 percent compared to the year before, better than the 4.2 percent decline that analysts on average predicted at the start of October, according to Thomson Reuters data.

After the bell on Monday, Lions Gate Entertainment (LGF.N) posted second-quarter revenue below analysts' expectations and its stock dropped 12.2 percent.

Priceline (PCLN.O) slumped 9.6 percent after a weak fourth-quarter profit forecast.

The energy sector .SPNY was the worst-hit among the S&P sectors, falling 1.45 percent after a fall in oil prices.

Only two Dow components rose. Walt Disney (DIS.N) gained 0.65 percent, while DuPont (DD.N) added 1.0 percent after the chemical and seeds producer said interim Chief Executive Ed Breen would stay on.

Dean Foods (DF.N) rose 7.30 percent after reporting a better-than-expected quarterly profit.

Plum Creek Timber (PCL.N) soared 17.3 percent. Weyerhaeuser (WY.N) said it would buy the company to create a $23 billion timber company. Weyerhaeuser fell 2.96 percent.

NYSE declining issues outnumbered advancers 2,476 to 627. On the Nasdaq, 1,964 issues fell and 849 advanced.

The S&P 500 index showed 3 new 52-week highs and 10 lows, while the Nasdaq recorded 101 new highs and 64 lows.

About 7.1 billion shares changed hands on U.S. exchanges, compared with the 7 billion daily average for the past 20 trading days, according to Thomson Reuters data.