Share

Stocks tumble on trade war anxiety; Dow down as much as 400

Share

Heightened worries that the U.S. and China are headed for a long standoff in their costly trade dispute put investors in a selling mood Thursday.

Stocks ended sharply lower on Wall Street in a broad sell-off that left the benchmark S&P 500 index on track for its third straight weekly loss and had the Dow Jones Industrial Average down more than 400 points until late afternoon.

Traders sought safety in the bond market, driving bond prices higher, which pulled the yield on the 10-year Treasury to 2.31%, the lowest level in more than a year.

The stock market has been highly volatile since Washington and Beijing escalated their dispute over trade earlier this month. Now, the two sides have broken off negotiations and appear set for a long standoff. Investors are concerned that a prolonged trade war could stunt economic growth and hurt corporate profits.

“Markets are appreciating how far apart the two sides are and how messy the grand deal would be that both sides had led us to believe was coming very quickly,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

Trending:
No Woke Agenda in Court: Rittenhouse Judge Says Rioters Can't Be Called 'Victims,' Approves This List Instead

The S&P 500 index fell 34.03 points, or 1.2%, to 2,822.24. The index was down 2.5% before the selling eased. The Dow lost 286.14 points, or 1.14%, to 25,490.47. At its lowest, the Dow slid 448 points.

The Nasdaq composite dropped 122.56 points, or 1.6%, to 7,628.28. The Russell 200 index of small company stocks gave up 30.25 points, or 2%, to 1,501.38.

Markets in Asia and Europe also saw steep losses.

The U.S. and China concluded their 11th round of trade talks earlier this month with no agreement. Instead, the U.S. moved to increase tariffs on Chinese goods, prompting China to reciprocate. The trade dispute escalated further after the U.S. proposed restrictions on technology sales to China, though it has temporarily backed off.

China is looking for ways to retaliate and has reached out for support from Russia and its neighbors in Asia. Both the U.S. and China have made overtures about continuing trade talks, but none are scheduled. That uncertainty has many traders nervous about how and when the trade dispute will be resolved.

“Now people are realizing how weighty the issue is and how many different aspects of it are just so intractable, where it’s going to be difficult for the Chinese side to give in and it’s going to be hard for the U.S. not to ask for some of these changes,” Samana said.

The resumption of trade hostilities this month has interrupted a market rally that saw the S&P 500 wipe out the fourth quarter’s sharp decline and hit a new record. The index is down 4.2% so far in May, though it’s still sporting a gain of 12.6% for the year.

Trade-sensitive technology stocks led the market slide Thursday. Many tech companies do significant business in China, and the Trump administration’s proposed restrictions on technology sales to Chinese companies hit their stocks hard.

Apple fell 1.7%, while chipmakers such as Advanced Micro Devices, Broadcom and Nvidia each dropped by at least 3%. An S&P index that tracks the chip industry’s performance has plunged about 15.2% so far this month amid the heightened trade tensions.

Related:
Pennsylvania Man Learns the Hard Way Why You Must Pay For What You Drink

Banks also took heavy losses in the sell-off as bond yields fell sharply. Lower yields mean lower interest rates on loans, which makes lending less profitable. JPMorgan dropped 2% and Bank of America slid 2.6%.

Exxon Mobil fell 2.3% and Chevron gave up 2.2%, part of a broad slump in energy sector stocks as the price of U.S. fell sharply. Benchmark U.S. crude plunged 5.7% to settle at $57.91 a barrel. It’s down 7.8% for the week. Brent crude, the international standard, closed 4.5% lower at $67.76 per barrel.

Investors sent shares in utilities and real estate companies higher. Those sectors are considered less risky, which makes them more attractive when traders are concerned about volatility and a slowdown in economic growth. Eversource Energy and SBA Communications, which owns wireless communication towers, each gained 1.5%.

Thursday wasn’t all about selling on Wall Street.

Traders bid shares in L Brands 12.8% higher after the owner of the Victoria’s Secret and Bath & Body Works chains blew away Wall Street’s first quarter earnings forecasts.

Avon shares rose 3.2% after Brazilian cosmetics maker Natura announced that it is buying the beauty products company for $3.7 billion in stock. The deal would create the world’s fourth-largest group of beauty products. Natura also currently owns retail stores like The Body Shop.

In other commodities trading Thursday, wholesale gasoline slid 3.9% to $1.91 per gallon. Heating oil lost 4.2% to $1.96 per gallon. Natural gas rose 1.4% to $2.58 per 1,000 cubic feet.

Gold climbed 0.9% to $1,285.40 per ounce, silver jumped 1.1% to $14.61 per ounce and copper added 0.1% to $2.68 per pound.

The dollar fell to 109.49 Japanese yen from 110.29 yen on Wednesday. The euro strengthened to $1.1183 from $1.1160.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

Truth and Accuracy

Submit a Correction →



loading

We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

Tags:
Share
The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands.
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
Location
New York City




loading

Conversation