Stocks drop 4 per­cent in rocky week

The News Herald (Willoughby, OH) - - Front Page - By Alex Veiga AP Busi­ness Writer

Wall Street capped a tur­bu­lent week of trad­ing Fri­day with the big­gest weekly loss since March.

Wall Street capped a tur­bu­lent week of trad­ing Fri­day with the big­gest weekly loss since March as traders fret over ris­ing trade ten­sions be­tween Wash­ing­ton and Bei­jing and sig­nals of slower eco­nomic growth.

The lat­est wave of sell­ing erased more than 550 points from the Dow Jones In­dus­trial Av­er­age, bring­ing its three-day loss to more than 1,400. For the week, ma­jor in­dexes are down more than 4 per­cent.

Wor­ries that the testy U.S.-China trade dis­pute and higher in­ter­est rates will slow the econ­omy has made in­vestors un­easy, lead­ing to volatile swings in the mar­ket from one day to the next.

On Mon­day, news that the U.S. and China had agreed to a 90-day truce in their es­ca­lat­ing trade con­flict drove stocks sharply higher, adding to strong gains the week be­fore. The next day, as doubts mounted over the like­li­hood of a swift res­o­lu­tion to the trade dis­pute, stocks sank. On Fri­day, an­other early rally faded into an­other sharp drop.

“We’re in a mar­ket where in­vestors just want to sell any up­side that they see,” said Lind­sey Bell, in­vest­ment strate­gist at CFRA. “The volatil­ity we’ve seen the last cou­ple of weeks has been pretty ex­treme in both di­rec­tions.”

The S&P 500 in­dex fell 62.87 points, or 2.3 per­cent, to 2,633.08. The in­dex has ended lower three out of the last four weeks. The Dow dropped 558.72 points, or 2.2 per­cent, to 24,388.95.

The Nas­daq com­pos­ite slid 219.01 points, or 3 per­cent, to 6,969.25. The Rus­sell 2000 in­dex of small­com­pany stocks gave up 29.32 points, or 2 per­cent, to 1,448.09.

The S&P 500 and Dow are in the red for the year again. The Nas­daq was hold­ing on to a mod­est gain.

Volatil­ity has gripped the mar­ket since early Oc­to­ber, re­flect­ing in­vestors’ wor­ries that the Fed­eral Re­serve might over­shoot with its cam­paign of rate in­creases and hurt U.S. eco­nomic growth.

Traders also fear that a pro­longed trade dis­pute be­tween the U.S. and China could crimp cor­po­rate prof­its and that tar­iffs will raises costs for busi­nesses and con­sumers. Un­cer­tainty over those is­sues helped drive the mar­ket’s sell-off this week.

“The Fed has taken the punch bowl away in get­ting back to rates where they are to­day,” said Doug Cote, chief mar­ket strate­gist for Voya In­vest­ment Man­age­ment. “We’re also go­ing to get back to more nor­mal volatil­ity.”

At the same time, traders are also wor­ried about a sharp drop in long-term bond yields as in­vestors plow money into Trea­surys, which tends to hap­pen when in­vestors ex­pect slower eco­nomic growth.

Tech­nol­ogy stocks ac­counted for much of the mar­ket’s broad slide Fri­day. Chip­maker Ad­vanced Mi­cro De­vices slid 8.6 per­cent to $19.46.

Health care sec­tor stocks, the big­gest gainer in the S&P 500 this year, took some of the heav­i­est losses. Med­i­cal de­vice com­pany Cooper lost 12.3 per­cent to $243.01.

Util­i­ties, which in­vestors fa­vor when they’re fear­ful, eked out a slight gain. PPL Corp. gained 2.8 per­cent to $31.09.

Oil prices rose af­ter OPEC coun­tries agreed to re­duce global oil pro­duc­tion by 1.2 mil­lion bar­rels a day for six months, begin­ning in Jan­uary. The move would in­clude a re­duc­tion of 800,000 bar­rels per day from OPEC coun­tries and 400,000 bar­rels per day from Rus­sia and other nonOPEC nations.

The news, which had been widely an­tic­i­pated, pushed crude oil prices higher. U.S. benchmark crude rose 2.2 per­cent to $52.61 a bar­rel in New York. Brent crude, used to price in­ter­na­tional oils, gained 2.7 per­cent to $61.67 a bar­rel in Lon­don.

The La­bor Depart­ment said U.S. em­ploy­ers added 155,000 jobs in Novem­ber, a slow­down from re­cent months but enough to sug­gest that the econ­omy is ex­pand­ing at a solid pace de­spite sharp gy­ra­tions in the stock mar­ket. The un­em­ploy­ment rate re­mained at 3.7 per­cent, nearly a fivedecade low, for the third straight month.

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