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Wall Street ends down as global trade worries mount; Dow falls over 2%

The Dow Jones Industrial Average fell 572.46 points, or 2.34%, to 23,932.76, the S&P 500 lost 58.37 points, or 2.19%, to 2,604.47 and the Nasdaq Composite dropped 161.44 points, or 2.28%, to 6,915.11

Caroline Valetkevitch | Reuters  |  NEW YORK 

Dow
Photo: Reuters

stocks dropped about 2% on Friday, with the Dow falling more than 570 points, as President Donald Trump's latest tariff threat on Chinese imports fuelled increasing concern over a U.S. with China.

Stocks added to losses and hit session lows in afternoon trading after Federal Reserve Chairman Jerome Powell said the central bank will likely need to keep hiking interest rates to keep inflation under control and said it was too soon to know if rising trade tensions would hit the economy.

Fears of a since Trump announced on steel and aluminium imports more than a month ago have kept investors on edge over concerns that such protectionist measures would hit global economic growth.

"It's a reaction to concerns about the administration's approach to trade. The market has vacillated between writing it off as just talk and assuming there could be a serious problem," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

He and others said investors also appeared to be reducing risk ahead of the weekend.

"If the market is down it often tends to accelerate on Friday. Investors don't want to take the risk of coming in Monday after having something happen over the weekend," Meckler said.

Trump late Thursday threatened to slap $100 billion more in on Chinese imports, while Beijing said it was fully prepared to respond with a "fierce counter strike".

The worries continued to pressure stocks even as Treasury Secretary Steve Mnuchin in an interview on CNBC Friday said he was cautiously hopeful the United States will reach an agreement with China on trade.

companies seen as more likely to be hit by trade tensions with China were among the biggest drags on the Dow, including Boeing , down 3.1%. The 500 industrials index, down 2.7%, had the biggest losses among sectors, though selling was broad-based.

Chipmakers, which as a group rely on China for about a quarter of their revenue, also declined. The Philadelphia semiconductor index fell 3.1%.

The Industrial Average fell 572.46 points, or 2.34%, to 23,932.76, the 500 lost 58.37 points, or 2.19%, to 2,604.47 and the Nasdaq Composite dropped 161.44 points, or 2.28%, to 6,915.11.

The 500 ended just above its 200-day moving average after trading well below that key support level that is watched by technical analysts.

Powell, who was speaking on the U.S. economic outlook in Chicago, also said the labour market appeared close to full employment. It was his first speech on the economic outlook since taking over as chairman on Feb. 5.

Before the session started, a Labor Department report showed nonfarm payrolls increased by a smaller-than-expected 103,000 last month. While annual growth in average hourly earnings rose to 2.7 percent, it stayed below the 3 percent that economists estimate is needed to lift inflation toward the Federal Reserve's 2-percent target.

"There was a hope that if he had a more dovish tone that that might be a counterbalance to the trade headwinds out there," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

For the week, the 500 was down 1.4%, the Dow was down 0.7% and the Nasdaq was down 2.1%.

Facebook share were down 1.3%. It backed for the first time proposed legislation requiring social media sites to disclose the identities of buyers of online political campaign ads and introduced a new verification process for people buying "issue" ads, which have been used to sow discord online.

Declining issues outnumbered advancing ones on the NYSE by a 3.77-to-1 ratio; on Nasdaq, a 3.59-to-1 ratio favoured decliners.

The 500 posted two new 52-week highs and seven new lows; the Nasdaq Composite recorded 40 new highs and 64 new lows.

About 7.2 billion shares changed hands on exchanges. That compares with the 7.3 billion daily average for the past 20 trading days, according to Thomson data.

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, April 07 2018. 03:01 IST
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