Abril 20, 2018

Stocks suffer worst week in two years

24 Marcha 2018, 01:15 | Dolorita Barahona

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Wall Street stocks plunged more than 700 points on Thursday after President Donald Trump hit China with tariffs on up to $60bn of goods, reviving fears of a trade war.

The Dow Jones industrial average lost 424.69 points, or 1.8 per cent, to 23,533.20.

Declining issues outnumbered advancing ones on the NYSE by a 4.51-to-1 ratio; on Nasdaq, a 4.09-to-1 ratio favored decliners. The Nasdaq Composite fell 178.61 points, or 2.43%, to 7,166.68. The Dow Jones Industrial Average performance was the worst since last month, and the fifth-worst in its history.

After a jittery afternoon of trading, major US stock indexes fell Wednesday while smaller companies fared better. The Nasdaq composite sank 158 points, or 2.2 percent, to 7,181. Trump on Thursday announced about $50 billion in annual tariffs on a variety of goods from China.

Facebook Inc. helped pace a decline in the tech sector, falling as much as 2.5 percent before paring losses. Job creation spiked to 313,000 in February, and corporate profits have surged to all-time highs.

The wild week wasn't all about tariffs.

Amid all those surprises, the Federal Reserve's anticipated interest-rate increase on Wednesday nearly felt like a side note.

The Dow fell more than 400 points, or 1.77%, to its lowest level since November, led by losses in companies as diverse as 3M to Goldman Sachs. The Chinese government vowed to defend itself.

Trump's announcement was "typical unilateralism and protectionism", China's Commerce Ministry said in a statement, and it had set a "very bad precedent".

"There is concern what the trade war could look like".

Markets have been shaky for several weeks since the president announced a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.

"Everbody's pushing each other around to do some negotiating", said David Collins, chief operations officer at CMC China Manufacturing Consultants, which advises companies on setting up factories in China.

"I think the stock market's gonna be great", he said. "The U.S. position could be seen as analogous to a supermarket offering price-match guarantees", Haefele said in a March 22 note. China is a big importer of American-produced food, especially staples such as soybeans.

In Europe, markets trimmed losses sharply in afternoon trade.

With Thursday's declines, the Dow has retreated 9.99% from its recent high, just shy of the 10% mark that signifies correction territory. The S&P 500 lost 2.5% to close at 2,643.69. The S&P 500 climbed 0.3% at the starting bell, with Nike and Wynn Resorts (WYNN) among its largest gains. Shares of Morgan Stanley (MS - Free Report), Bank of America (BAC - Free Report), Goldman Sachs (GS - Free Report) and Regions Financial (RF - Free Report) were down 4.3%, 4.1%, 3.5% and 4.7%, respectively.

This week, the Federal Reserve also hiked interest rates by twenty-five basis points as expected and its new chairman Jerome Powell said that it is increasing its forecast for likely rate hikes for next year, which adds to fears given that an additional three increases are expected this year.

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