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    Senior Member JohnDoe2's Avatar
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    Dow sinks 700 points as trade war fears pummel stocks

    Dow sinks 700 points


    BREAKING NEWS
    Stocks fall sharply after President Trump threatened more tariffs in a confrontation with China over trade


    Dow sinks 700 points as trade war fears pummel stocks

    by Nathaniel Meyersohn @CNNMoneyInvestApril 6, 2018: 2:54 PM ET

    Stocks fell sharply Friday as trade tensions between the United States and China heated up.


    The Dow lost nearly 700 points, a drop of more than 2%, after President Trump threatened to escalate a confrontation with China over trade. The S&P 500 and the Nasdaq each declined more than 2%.

    Friday's losses wiped out gains for the week, and the Dow sank back into correction territory 10% below its all-time closing high in January.


    Trump said late Thursday that he was considering tariffs on $100 billion more in Chinese exports, which would triple what the United States is already planning.


    Related: Trump threatens China with new $100 billion tariff plan


    "The fear of a policy mistake on trade is increasing," said Art Hogan, chief market strategist at B. Riley FBR.

    All 30 companies on the Dow lost ground on Friday. Caterpillar (CAT), Boeing (BA) and Nike(NKE), giants with heavy exposure in China, led the index's losses.


    "The ratcheting up of trade tensions clearly carries risks. The tariff threats, even if only intended as bargaining tools, will be difficult to back down from if talks fail to deliver results," Capital Economics' Julian Evans-Pritchard wrote in a research note Friday.


    Wary investors had been holding out hope that the two sides will reach a deal before the proposed trade barriers go into effect.


    Related: Trade war? Not so fast. Why stocks are rallying again


    White House officials, including top economic adviser Larry Kudlow, have sought to soothe business leaders' fears of a trade war that would slow down growth.


    But Wall Street showed signs of anxiety Friday as the administration "stuck a different tone" on trade, Hogan said. "It feels like we're taking one step forward and two steps back."


    In a radio interview Friday morning, Trump said, "I'm not saying there won't be a little pain, but the market has gone up 40%, 42%, so we might lose a little bit of it."


    Selling accelerated later in the day after Treasury Secretary Steve Mnuchin told CNBC, "There is the potential of a trade war."


    Investors had been operating under the assumption China and the United States were negotiating to avoid a trade conflict, but Mnuchin avoided questions about whether the two countries were actively talking.


    Related: Beyond passwords: Companies use fingerprints and digital behavior to ID employees


    "We've gone from Larry Kudlow trying to calm the markets down to the administration saying, 'Hey, ignore the markets,'" Hogan said.


    The VIX, a measure of market volatility, spiked 12%. CNNMoney's Fear and Greed index sank further into "extreme fear" territory.


    Earlier this week, the Trump administration announced plans for tariffs on $50 billion worth of Chinese goods in retaliation for China's alleged theft of US intellectual property. Beijing fired back hours later by threatening tariffs on $50 billion worth of US goods, including cars, planes and soybeans.


    The moves follow US tariffs that were imposed earlier this year on Chinese steel and aluminum. China targeted US fruits, nuts, wine and steel pipes in response.


    Related: How much ammo does China have for a trade war?


    Stocks were mostly unaffected by the March jobs report, which showed that the US economy added 103,000 positions, down from a much bigger gain in February and well below what analysts were expecting.


    Wages grew 2.7% in March compared with a year earlier, in line with expectations. Investors were watching that number because it's a barometer of inflation. In February, an unexpected jump in wage growth set off inflation alarm bells and caused stocks to plunge.


    The Federal Reserve is on track to raise interest rates three times this year, but the Fed could speed up its plan if inflation creeps higher.


    The combination of the hiring slowdowns and modest wage growth temporarily eased Wall Street's concerns that the economy was overheating.


    The yield on the 10-year US Treasury note, which has been steadily climbing as investors' inflation expectations rise, dipped slightly to 2.78% after the jobs report.


    "Investors breathed a sigh of relief," said Sam Stovall, chief investment strategist at CFRA Research. "Now we only have one issue to deal with, and that's trade."

    https://www.yahoo.com/gma/pentagon-f...opstories.html
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    Senior Member JohnDoe2's Avatar
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    Oooops. Meant to put this in OTHER. Please move. THANKS.
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    Senior Member Judy's Avatar
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    It closed at 23,972, down 572. Not bad given big tariff talk and low jobs report for March. Trump needs to move forward full speed ahead on the tariffs and I personally think there were so many job hirings in February, that this low jobs report is just balancing it out.
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