Stocks drop on trade jabs from Trump
Stocks ended the week the way they began it: tumbling as investors worried that tariffs and harsh words between the United States and China mark a trade war that could derail the global economy. The latest drop came as the White House proposed tripling the amount of goods from China that will be subject to tariffs.
The stock market changed direction again and again this week as investors tried to get a sense of how far the trade dispute between the world’s two largest economies will escalate. On Friday, stocks of technology firms, banks and industrial and healthcare companies sank. The market didn’t get any help from a March jobs report that was weaker than expected.
With Trump administration officials sounding conciliatory one day and hostile the next, and the president quick to fire off yet another tweet, investors simply don’t know what the U.S. wants to achieve in its talks with China, said Katie Nixon, chief investment officer for Northern Trust Wealth Management. Even though investors are optimistic about the state of the global economy and company profits continue to grow, Nixon said, the administration is creating the thing investors hate most: uncertainty.
The Dow Jones industrial average sank 572.46 points, or 2.3%, to 23,932.76. Earlier in the day, it had fallen as much as 767 points. The Dow is down 10% from its record high in late January.
The Standard & Poor’s 500 index, which many index funds track, slid 58.37 points, or 2.2%, to 2,604.47. The Nasdaq composite sank 161.44 points, or 2.3%, to 6,915.11. The Russell 2000 index of smaller-company stocks fell 29.63 points, or 1.9%, to 1,513.30.
The Dow average, which contains numerous multinational companies including industrial powerhouses Boeing and Caterpillar, swung dramatically this week, with almost 1,300 points separating its lowest point Monday from its high late Thursday. It ended down 0.7% for the week.
On Friday, construction equipment maker Caterpillar slid 3.5% to $142.99, and aerospace company Boeing tumbled 3.1% to $326.12. Among technology companies, Apple fell 2.6% to $168.378 and PayPal sank 4% to $73.86.
Bond prices rose, sending yields down. The yield on the 10-year Treasury fell to 2.77% from 2.83%. Lower yields mean banks can’t make as much money from lending, and bank stocks fell.
WageWorks slid 3.7% to $43.40 after the employee benefits firm said it overstated its revenue in 2016, named a new CEO and said several executives resigned.
Benchmark U.S. crude dropped $1.48, or 2.3%, to $62.06 a barrel in New York. Brent crude, used to price international oils, fell $1.22, or 1.8%, to $67.11 a barrel in London. Oil prices fell almost 5% this week as investors wondered if an increase in trade tensions will reduce demand for oil.
Wholesale gasoline fell 3 cents to $1.95 a gallon. Heating oil fell 2 cents to $1.96 a gallon. Natural gas rose 3 cents to $2.70 per 1,000 cubic feet.
Gold rose $7.60 to $1,336.10 an ounce. Silver edged up 1 cent to $16.36 an ounce. Copper fell 2 cents to $3.06 a pound.
The dollar fell to 106.85 yen from 107.12 yen. The euro rose to $1.2285 from $1.2256.