Stocks sink on trade talk, growth fears

NEW YORK — Stocks fell sharply Tuesday following new signs the global economy is weakening and reports of difficulties in trade talks between the U.S. and China. That broke a four-day winning streak for U.S. indexes.

Major global indexes traded lower after the International Monetary Fund trimmed its economic forecasts for 2019 and 2020 and pointed to risks including trade tensions and rising interest rates. China’s government said its economy grew in 2018 at the slowest pace since 1990. U.S. stocks took further losses after the Financial Times reported that the Trump administration canceled a proposed a meeting with Chinese trade officials this week.

Technology and internet companies skidded while energy companies sank with oil prices. Industrial companies also fell, hurt by the slower growth forecast and trade concerns as well as some weak fourth-quarter earnings. Bond prices climbed as investors looked for safer investments.

“We began last year, 2018, with a synchronized global recovery, and what we have now is a slowdown globally,” said Quincy Krosby, chief market strategist at Prudential Financial. She said the reported difficulty in trade talks “has shaken up confidence that the U.S. and China are moving closer in the negotiating phase.”

The S&P 500 index lost 37.81 points, or 1.4 percent, to 2,632.90. The Dow Jones Industrial Average slid 301.87 points, or 1.2 percent, to 24,404.48. The Nasdaq composite fell 136.87 points, or 1.9 percent, to 7,020.36.

The IMF now says the global economy will grow 3.5 percent this year, down from its previous forecast of 3.7 percent. It cut its estimate for growth in 2020 to 3.6 percent from 3.7 percent. Earlier in the day, China reported its economy expanded by 6.6 per-

cent in 2018.

Lately, global markets have rallied as investors began to feel that a slowdown in the world economy might not be that painful. The S&P 500 is up 5 percent in 2019 and has jumped 12 percent since hit- ting its recent low on Dec. 24. But Tuesday’s losses were a reminder that investors will remain sensitive to clues that the global economy is weak- ening, and the trade dispute may be the top threat to eco- nomic growth.

According to the Financial Times, two officials were scheduled to travel to the U.S. ahead of meetings between the U.S. and China’s top trade representatives next week. It said the meetings were canceled because of a lack of progress on some critical issues.

Technology and indus- trial companies took some of the worst losses. Farm equipment company Deere fell 3.5 percent to $158.84. Among technology companies, chipmakers absorbed sharp losses. Nvidia fell 5.2 percent to $148.77.

Power tools maker Stanley Black and Decker sank 15.5 percent to $115.69 after its forecast for 2019 fell short of Wall Street estimates.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.74 percent from 2.78 percent.

Homebuilders also sank after U.S. home sales cratered in December.