Stocks mostly recover from an early plunge on Wall Street
A turbulent day on Wall Street ended Tuesday with stocks climbing nearly all the way out of a steep, broad sell-off that at one point erased more than 500 points from the Dow Jones Industrial Average.
Even with the late-afternoon rebound, stocks extended the market’s recent string of declines, giving the benchmark S&P 500 index its fifth-straight loss. Bond prices rose, sending yields lower, as investors sought out safer investments.
Hong Kong’s Hang Seng index sank 3.1 percent. European markets also closed sharply lower.
The latest selling came as investors grew unsettled over slowing economic growth in China and increased signs that President Donald Trump’s aggressive trade policies are beginning to weigh on corporate earnings. Caterpillar and 3M slumped Tuesday after the companies warned of rising costs related to tariffs.
The S&P 500 fell 15.19 points, or 0.6 percent, to 2,740.69. The Dow lost 125.98 points, or 0.5 percent, to 25,191.43. The average had been down more than 540 points.
The Nasdaq slid 31.09 points, or 0.4 percent, to 7,437.54. The Russell 2000 index of smaller-company stocks gave up 12.91 points, or 0.8 percent, to 1,526.59. The index is now down for the year.
Markets have been rattled in recent weeks by increased worries over the impact that rising interest rates, inflation and the escalating trade dispute between the U.S. and China may have on Corporate America.
Trump has imposed tariffs on about $250 billion in Chinese imports, and Beijing has retaliated by targeting $110 billion in American products. Trump has threatened to tax another $267 billion in Chinese products, a move that would cover virtually everything China ships to America.
The two countries are locked in a dispute over U.S. allegations that China steals U.S. technology and forces U.S. companies to share trade secrets in exchange for access to the Chinese market.
Recent data show China’s economic engine is growing more slowly. From July to September, it grew 6.5 percent, the slowest pace since early 2009. The world’s second-largest economy was cooling even before the outbreak of a tariff war with Washington. That contrasts with the momentum of the U.S. economy. The government is expected to say Friday that the U.S. economy grew by 3.3 percent in the third quarter, after growing by 4.2 percent in the second quarter.
The strong U.S. economy has helped power earnings growth for companies in the S&P 500. While those companies are expected to deliver 21.9 percent earnings growth for the third quarter, according to S&P Global Market Intelligence, investors are concerned about future growth amid rising inflation, interest rates and uncertainty over trade.
Losses in banks, energy and technology companies outweighed gains by internet and consumer-goods stocks. A sharp sell-off in Chinese and other global markets set the stage for the volatile day on Wall Street.
Bond prices rose, sending the yield on the 10-year Treasury note down to 3.17 percent from 3.19 percent late Monday.
U.S. crude fell 4.2 percent to settle at $66.43 per barrel. Brent crude, used to price international oils, dropped 4.2 percent to close at $76.44 per barrel. Heating oil slid 3 percent to $2.25 a gallon. Wholesale gasoline lost 3.7 percent to $1.84 a gallon. Natural gas gained 2.4 percent to $3.21 per 1,000 cubic feet.