Dow plunges over 700 points amid Trump's trade move, FB scandal

Bessie Dean
March 25, 2018

The Nasdaq fell 2.4 percent Friday, losing 6.5 percent on the week, weighed down by fading technology stocks.

Seed producers and pig breeders are jumping in mainland China trading as the government's reciprocal tariffs on the USA included fruits, nuts and pork.

Brent crude, used to price worldwide oils, rose 33 cents to $68.71 a barrel in London.

China wasted little time in threatening to retaliate against the United States, underlining the risk of a tit-for-tat escalation that hurts global trade. When first-quarter earnings season gets under way in earnest late next month, those factors could help stabilize the stock market and perhaps return it to an upward trajectory, he said.

"I think the stock market is going to be great", he said Friday at the White House after a reporter asked about the sell-off.

The significant dive came on the same day President Donald Trump signed an executive order implementing new tariffs on at least $50 billion of goods imported from China.

United States 10-year treasury yields, which fell nearly eight basis points on Thursday, were set for their biggest two-week fall since September.

Despite the craziness, some money managers cautioned that the USA economy remains fundamentally strong, aided by a tax cut, repatriation of corporate profits and a budget bill signed by President Trump on Friday that includes the largest hike in military spending in 15 years.

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'Dealers are anxious this could be the first shot fired in a trade war between the two largest economies in the world, said market analyst David Madden at CMC Markets UK.

US stocks ended a turbulent week with a late-day sell-off that knocked the Dow down more than 400 points and pushed it officially back into "correction" territory as fears of a looming trade war prompted nervous investors to sell.

It's been a miserable week for higher-risk markets globally, as a trade war edged closer, the tech sector was roiled by Facebook's privacy scandal and data showed European growth sputtering.

"The administration is moving forcefully into the anti-trade portion of its policy agenda", Barclays economist Michael Gapen wrote in a report on Friday. The yield on the 10-year Treasury note slipped to 2.82 percent from 2.88 percent.

The dollar fell to 105.61 yen from 106.10 yen.

On Friday, the Dow lost 426 points to close the week, down almost 1.8 percent - hitting its lowest level for the year. Brent crude, the worldwide standard for oil prices, added $1.54, or 2.2 per cent, to $70.45 a barrel in London. Gold climbed $22.50, or 1.7 per cent, to $1,349.90 an ounce and silver gained 20 cents, or 1.2 per cent, to $16.58 an ounce.

Wholesale gasoline remained at $2.01 a gallon. Decliners outnumbered advancers on the NYSE by a 2.29-to-1 ratio. Heating oil lost 1 cent to $1.99 a gallon. The euro rose to $1.2337 from $1.2302. Natural gas dipped 3 cents to $2.59 per 1,000 cubic feet. Silver fell 3 cents to $16.39 an ounce.

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