Wall Street market nosedives as investors flee on trade war fears

NEW YORK — Wall Street tumbled last Friday with more than 1,000 points knocked off the Dow in two days as investors, increasingly nervous about a potential US trade war with China, shied away from risk ahead of the weekend and sought shelter from further losses.

In a volatile session, the S&P 500 came within a hair of its 200day moving average, a key technical level. The benchmark index also nudged closer to its February low, which marked a correction, ending 9.9% lower than its Jan. 26 record.

“There is concern what the trade war could look like. Investors want to manage their risk. If it escalates rapidly, it could be a major headwind for the market,” said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.

President Donald Trump’s plans for tariffs on up to $60 billion in Chinese goods moved the world’s two largest economies closer to a trade war as China declared plans to levy duties on up to $3 billion of US imports including fruit and wine even as it urged the United States to “pull back from the brink.”

The Dow Jones Industrial Average fell 424.69 points or 1.77% to 23,533.2; the S&P 500 lost 55.43 points or 2.10% to 2,588.26 after hitting an intraday low that was barely above its 200-day moving average of 2,585.22. The Nasdaq Composite dropped 174.01 points or 2.43% to 6,992.67.

For the week, the Dow was down 5.67%; the S& P 500 was down 5.95%; and the Nasdaq was down 6.54%, marking their biggest weekly percentage falls since January 2016.

The Dow was down 11.6% since its Jan. 26 high, and hit its lowest close since confirming a correction in February.

The CBOE Volatility Index, the most widely followed barometer of expected near-term volatility in the S&P 500, finished up 1.53 points at 24.87, its highest close since Feb. 13.

The S&P’s financial sector was the S&P’s biggest percentage loser, at 3%, after a volatile session in which it was whip-sawed by volatile Treasury yields.

Bloomberg News cited China’s ambassador to the US saying that the country is “looking at all options” in response to tariffs, which could include scaling back purchases of US Treasuries.

Nasdaq was weighed down by declines in momentum stocks such as Facebook, Amazon.com, Microsoft and Google’s parent Alphabet.

The semiconductor sector took a fall after Micron Technology’s quarterly report stoked fears about falling NAND prices. The Philadelphia Semiconductor index slumped 3.3%. —