The Register Citizen (Torrington, CT)
Dow hits longest slump in a year
U.S. stocks fell, though major indexes traded well off session lows as a flare up in trade tensions eased to a simmer. Treasuries rose with the dollar.
The Dow Jones Industrial Average notched a sixth straight loss in its longest slump in more than a year, and the S&P 500 equaled its biggest drop in three weeks. The declines came after steep losses in Asia and Europe sparked by renewed concern the U.S. and China are headed for a full-blown trade war. Neither side escalated attacks Tuesday after President Donald Trump threatened fresh tariffs and China promised to retaliate in kind.
Tough trade talk is nothing new for investors in 2018, but the perception that stress is ratcheting up between the U.S. and China hit markets hard on Tuesday morning before U.S. shares saw some relief in afternoon trading. The protectionist moves come at a time when many are already voicing concern that global growth could lose momentum as the U.S. tightens monetary policy and Europe pulls back on stimulus.
“The degree of both rhetoric and substance behind the proposals that have gone back and forth recently is worrisome,” Mark Howard, a senior multi-asset specialist at BNP Paribas, said in an interview on Bloomberg TV. “This has caused a bit of a risk-off trade today, and it’s a cause of caution by major investors.”
The euro dropped after the latest dovish message from the European Central Bank, and the pound weakened as the U.K. prepared for another knife-edge Brexit vote Wednesday.
The lurch toward protectionism rattled commodities and commodity-linked currencies, which retreated across the board. Oil fell as traders weighed OPEC’s discussions on a compromise over increasing output ahead of a meeting in Vienna this week.