401(K) FEARS AMID SLIDE

Dow plunges 500 points, more than 1,000 in week

Boston Herald - - NEWS - By JOR­DAN GRA­HAM AND JOE DWINELL Her­ald Wire Ser­vices con­trib­uted to this re­port.

The stock mar­ket’s stun­ning slide has stoked fears over 401(k) sav­ings ac­counts, with one ex­pert warn­ing those closer to re­tire­ment have rea­son to worry.

“Those clos­est to re­tire­ment are the most vul­ner­a­ble as the econ­omy gets worse,” said MIT pro­fes­sor Thomas A. Kochan. “It’s very clear peo­ple are wor­ried. The mar­ket cre­ates this un­cer­tainty.”

Kochan told the Her­ald last night those with 401(k) ac­counts should “stay with it” and ride out this storm — even as the mar­ket teeters over strained re­la­tions with China with Pres­i­dent Trump threat­en­ing more tar­iffs.

“You’ ve got to stay with it for the long run,” Kochan added. “If you can hang in there, that’s the best ad­vice.”

The Dow Jones In­dus­trial Av­er­age plunged more than 500 points yesterday, bring­ing its weekly drop to more than 1,000. All eyes will be on the mar­ket come Mon­day’s open­ing bell.

“I don’t re­ally see a last­ing re­cov­ery,” said Aaron Dunn, Co-Di­rec­tor of Value Eq­ui­ties and Port­fo­lio Man­ager at Ea­ton Vance Man­age­ment in Bos­ton. “I don’t know we’ll see a real bal­ance through the end of the year. I think you might have a bit of a buyer’s strike through the end of the year.”

The Dow fell 558 points, or 2.2 per­cent, to 24,388 yesterday. The S&P 500 lost 62 points, or 2.3 per­cent, to 2,633. The S&P 500 and Dow are now in the red for the year. The Nas­daq was hold­ing on to a mod­est gain.

Fu­el­ing the de­cline af­ter an al­ready hec­tic week was the court ap­pear­ance of Chi­nese com­pany Huawei’s CFO on fraud charges. The ex­ec­u­tive is ac­cused of cir­cum­vent­ing U.S. sanc­tions on Iran, and faces decades in prison.

“It’s the trade ten­sions and re­ally the un­cer­tainty that ex­ists in the mar­ket with re­gard to how the trade un­cer­tainty with China plays out,” Dunn said. “We’re in tar­iff ne­go­ti­a­tions with China and we ar­rest the CFO of one of their largest com­pa­nies.”

Ear­lier this week mar­kets ral­lied on news of a trade agree­ment with China, but de­te­ri­o­rated as specifics — or lack thereof — emerged.

“The prospect for a trade deal within the 90-day time frame, in our view, is un­likely,” Wells Fargo economists wrote in a re­search note. “The pace of ne­go­ti­a­tions would have to pick up quite con­sid­er­ably, and with ev­i­dence suggest­ing dif­fer­ences still re­main, the like­li­hood for a deal in the short­term re­mains low.”

The La­bor Depart­ment also an­nounced U.S. job growth de­clined mod­estly in Novem­ber, a move that could sig­nal a slower but still steady pace of hir­ing and growth next year.

GETTY IM­AGES

GO­ING, GO­ING, GONE: Traders work on the floor of the New York Stock Ex­change yesterday, when the Dow Jones in­dus­trial av­er­age fell more than 500 points as in­vestors re­main con­cerned about a pos­si­ble trade war be­tween China and Amer­ica.

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