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Wall Street swamped by fresh US-China trade worries; Dow falls 458 points

Stocks resumed their slide after a rare midweek U.S. trading holiday, while a drop in oil prices also hit the energy sector

Reuters 

Wall Street, US stocks

US stocks fell on Thursday as the arrest of a top Chinese stirred fears of fresh tensions between the and over trade, although Wall Street's main indexes reduced steep losses from earlier in the session.

Stocks resumed their slide after a rare midweek US trading holiday, while a drop in also hit the sector <.SPNY>, which was the worst-performing S&P 500 group.

The of Technologies was arrested in and faces extradition to the

The arrest comes as investor enthusiasm had already faded following a truce reached over the weekend in talks between the and China, which had prompted some hope about resolving differences over trade that have clouded the stock market's outlook this year.

"Clearly, the arrest was the individual catalyst that caused today's moves lower," said Mark Hackett, at Nationwide.

"It clearly gives voice to the bears who are saying, 'There are no real details around this deal, and we don't have any specific promises by the Chinese,'" Hackett said.

With Thursday's declines, the S&P 500 slipped back into negative territory for 2018.

The <.DJI> fell 458.31 points, or 1.83 percent, to 24,568.76, the S&P 500 <.SPX> lost 39.35 points, or 1.46 percent, to 2,660.71 and the Composite <.IXIC> dropped 53.04 points, or 0.74 percent, to 7,105.39.

However, by afternoon the indexes had climbed off their lows from earlier in the day.

Stocks had fallen to near levels seen in October and November, Hackett said.

"The bounce off of that low is encouraging," he said.

Aside from trade, concerns over bond yields and interest rates have pressured the in recent days.

US Treasury yields tumbled, with 10-year yields hitting three-month lows as traders scaled back expectations on the number of rate hikes the Federal Reserve would implement amid weakening economic data and market volatility.

Financial shares <.SPSY>, which are sensitive to bond yield swings, fell 3.2 percent and were the biggest declining group following

The sector slumped 3.3 percent. Oil fell after OPEC and allied exporting countries ended a meeting without announcing a decision to cut crude output.

Losses for the S&P 500 were mitigated by gains for , and some of the other technology and that have been hit particularly hard during the market's pullback in recent months.

The indexes fell more than 3 percent each on Tuesday. were closed on Wednesday for a day of mourning for former George H.W. Bush, who died on Friday.

Declining issues outnumbered advancing ones on the NYSE by a 3.25-to-1 ratio; on Nasdaq, a 2.28-to-1 ratio favoured decliners.

The S&P 500 posted 4 new 52-week highs and 70 new lows; the Composite recorded 8 new highs and 351 new lows.

 

 

First Published: Fri, December 07 2018. 02:38 IST
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