Dow drops more than 500 points on trade worries

06 Marcha, 2018, 00:53 | Author: Arnold Perez
  • Stocks are opening lower Friday as investors remain concerned that President Donald Trump's plan to impose tariffs on steel and aluminu

It's the latest dizzying swing in a whirlwind week dominated by fears about a possible trade war and a more aggressive Federal Reserve.

U.S. President Donald Trump tweeted on Thursday that theU.S. steel and aluminum industries need "free, fair and smarttrade".

Trump took to Twitter to defend his promise from Thursday to impose stiff tariffs on imports of steel and aluminum, which has investors anxious about escalating retaliation by other countries and higher inflation.

Investors have a different impression. The move raised the threat of escalating retaliation by other countries and higher inflation.

The S&P 500 trimmed its loss as the day went on and was bouncing between gains and losses by the early afternoon.

KEEPING SCORE: The S&P 500 was down 24, or 0.9 percent, to 2,653, shortly after 10 a.m.

The Dow Jones industrial average sank 382 points, or 1.5 percent, to 25,027.

"Investors are still trying to digest where the Fed is going to be between now and year end, and Powell has given it a hawkish tilt", said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"I view almost every one of Trump's actions through a negotiation lens", he said.

"These are the dangers", said said Donald Selkin, New York-based chief market strategist at Newbridge Securities Corp.

Companies in the S&P 500 got 43 per cent of their sales from outside the United States in 2016, according to the most recent data from S&P Dow Jones Indices. The index had five losses of 1% or more in February, more than it did in all of past year. The comments renewed investor concerns that increasingly nationalistic governments will impose barriers hurting the global economy and trade.

Stocks are opening lower Friday as investors remain concerned that President Donald Trump's plan to impose tariffs on steel and aluminum imports will lead to ret
Dow drops more than 500 points on trade worries

Those losses in early February pushed the S&P 500 down more than 10 percent from a January 26 record high, confirming the market was in a correction. That means Apple and other big USA companies are dependent on customers not only in Peoria but also Paris and Peru.

Stocks of smaller companies, which tend to do more of their business in the United States and may not feel as much pain from a global trade war, held up better than the rest of the market. Shares of the company, which sells dental and animal health products, dropped $7.57, or 24 percent, to $24.01.

The S&P 500 and the Dow also snapped a 10-month winning streak, closing out a month marked by spikes in volatility and fears that rising inflation would prompt the Federal Reserve to pick up the pace of interest rate hikes. That could easily upset markets, which had been enjoying a remarkably smooth ride past year.

Powell told the Senate Finance Committee that he does not see inflation in workers' wages "at a point of acceleration". "They want to advance the ball gradually".

The SPI had been looking at a fall of 33 points just before Trump's announcement just after 5 am Sydney time, this then surged to a fall of 61 points, or more than 1% at the close.

That's more than the market capitalizations of CBS Corp. and Viacom Inc. combined. Its shares dropped $7.71, or 5 percent, to $147.99. It jumped $129.03, or 6.8 percent, to $2,034.04 after it reported a bigger profit for the latest quarter than analysts expected, aided by stronger travel bookings.

OVERSEAS: France's CAC 40 fell 1.1 percent and Germany's DAX was down 2 percent. The FTSE 100 in London dropped 0.8 percent. The loonie is nearly down two cents against the USA dollar since February 16. Brent crude, the worldwide standard, fell 85 cents to 65.78 dollars per barrel.

Gold rose $18.20 to settle at $1,323.40 per ounce.

Bond yields and the price of gold rose Friday, both signs that investors expect inflation might tick up.

Apple gave up $4.65, or 2.6 per cent, to $173.47 and Pfizer shed $1, or 2.7 per cent, to $35.32.

The dollar dipped to 106.24from 106.66 yen late Wednesday. The euro rose to $1.2331 from $1.2255, and the British pound rose to $1.3790 from $1.3768.

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