US stocks slump in early trade ahead of Christmas holiday
BEIJING (AP) — Japanese stocks plunged Tuesday and other Asian markets declined following heavy Wall Street losses triggered by President Donald Trump’s attack on the U.S. central bank.
The Nikkei 225 fell by an unusually wide margin of 5.1 percent to 19,147.45 points. The Shanghai Composite Index lost 2.1 percent to 2,473.75. Benchmarks in Thailand and Taiwan also declined.
Markets in Hong Kong, Australia and South Korea were closed for Christmas.
Wall Street indexes fell more than 2 percent on Monday after Trump said on Twitter the Federal Reserve was the U.S. economy’s “only problem.” Efforts by Treasury Secretary Steven Mnuchin to calm investor fears only seemed to make matters worse.
U.S. stocks are track for their worst December since 1931 during the Great Depression.
The market has been roiled by concerns about a slowing global economy, the trade dispute with China and another interest rate increase by the Fed.
Trump’s Monday morning tweet heightened fears about the economy being destabilized by a president who wants control over the Fed. Its board members are nominated by the president, but they make decisions independently of the White House. The board’s chairman, Jerome Powell, was nominated by Trump last year.
“The only problem our economy has is the Fed,” the president said on Twitter. “They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch — he can’t putt!”
The Standard & Poor’s 500 index slid 2.7 percent to 2,351.10. The benchmark index is now down 19.8 percent from its peak on Sept. 20, close to the 20 percent drop that would officially mean the end of the longest bull market for stocks in modern history — a run of nearly 10 years.
The Dow Jones Industrial Average sank 2.9 percent to 21,792.20. The Nasdaq skidded 2.2 percent to 6,192.92.
On Sunday, Mnuchin made a round of calls to the heads of the six largest U.S. banks, but the move only raised new concerns about the economy.
Most economists expect U.S. economic growth to slow in 2019, not slide into a full-blown recession. But the president has voiced his anger over the Fed’s decision to raise its key short-term rate four times in 2018. That is intended to prevent the economy from overheating.
Technology stocks, health care companies and banks took some of the heaviest losses in Monday’s sell-off. Wells Fargo slid 3.4 percent, Microsoft 4.2 percent and Johnson & Johnson 4.1 percent.
U.S. markets reopen Wednesday.
In energy markets, Brent crude, used to price international oils, lost 9 cents to $50.68 per barrel in London. The contract plummeted $3.33 on Monday to close at $50.77.
In currency trading, the dollar gained to 110.15 yen from Monday’s 110.45 yen. The euro advanced to $1.1417 from $1.1405.
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