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Stocks - Wall Street Plunges on Trade, Growth Worries

Published 05/23/2019, 03:20 PM
Updated 05/23/2019, 04:32 PM
© Reuters.

Investing.com - Stocks took a beating Thursday as investors worried that a U.S.-China trade war could drag on indefinitely and sap global growth.

The only good news was that the major indexes bounced off their lows in the last hour of trading. The Dow Jones Industrial Average fell 1.1%. The S&P 500 slumped 1.2% and the Nasdaq Composite dropped 1.6%. At their lows, the Dow and S&P 500 had been off as much as 1.7% with the Nasdaq off 2.1%.

Stocks have succumbed to selling pressure in May after Washington and Beijing engaged in tit-for-tat tariffs and other retaliatory measures, with the S&P 500 on track to post its worst monthly decline since the December selloff.

Beijing said on Thursday Washington needs to correct its "wrong actions" for trade talks to continue after the United States blacklisted Huawei Technology last week.

In further evidence of the trade war hitting the U.S. economy, data from IHS Markit showed manufacturing growth measured its weakest pace of activity in nearly a decade and new orders fell for the first time since August 2009.

The Trump Administration outlined a $16-billion plan to help farmers offset the impact of the trade war on Thursday. Nonetheless, wheat prices, corn prices and soybean prices all fell.

The Dow was off as many as 448 points before bargain hunters started to buy across the market, cutting the day's losses to 286 points. The Dow finished the day looking at its fifth-straight weekly loss. The S&P 500 and Nasdaq were looking at their third weekly losses in a row. The Dow is off 4.1% for May while the S&P is down 4.2% and the Nasdaq 5.77%. The Dow is is 5.4% below its 52-week high, reached in October. The S&P 500 and Nasdaq are 4.6% and 6.7% below their 52-week highs, reached in April.

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The selling was broad, with energy, industrial and technology shares taking the brunt of the selling pressure. Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) were two of the bigger drags on the Dow, along with United Technologies (NYSE:UTX), Dow Inc (NYSE:DOW) and IBM (NYSE:IBM).

In addition, oil prices fell nearly 6% in response to weak demand questions and related issues. Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) each fell about 2.3%.

Interest rates fell and gold prices rose as many investors sought refuge from stocks. The 10-year Treasury yield fell to 2.296%, the lowest closing yield in two years.

Gold, meanwhile, rose $11.20, or 0.9%, to $1,285.40 an ounce and is up 0.3% on the year.

Among the days highs and lows:

L Brands (NYSE:LB), Medtronic (NYSE:MDT) and Target (NYSE:TGT) were among the top performers in the S&P 500 on Thursday.

NetApp (NASDAQ:NTAP), Hess (NYSE:HES) and Devon Energy (NYSE:DVN) were among the weakest performers.

-- Reuters contributed to this report.

Latest comments

Let's see.....we gave big business and the wealthy huge tax breaks. Big business purchased their own stock with the tax break which ran up the stock price for the wealthy. And now we are going to tax the middle class with tariffs from China.WHEN IS THIS ELECTION?
The sooner US companies realize that China isn't a gold mine for them long term, the better. All of these companies want to get into China and are so greedy about it that they can't contemplate that in order to do business in China you have to form a partnership with a Chinese company. When you do that, the Chinese government essentially gets to pick which company you will partner with, and that company is almost always owned by the Chinese government. Have trade secrets, the Chinese government now has it. Have designs for a product. The Chinese government now has it. The Chinese government has proven, time and time again that they will take that information and pass it to another company and let that company make counterfit products, or let the original venture flounder so bad that the foreign company leaves, then the Chinese company picks up the business and just runs with the foreign name and keeps on making money. Doing business in China is like trying to kiss a rattle snake.
Comparing to the previous generation of American soldiers that had sacrificed their lives to protect the freedom and democracy that we Americans can enjoy today, the short term economic pain is minuscale to say the least
Why are people on this board so afraid of China? Was America not prosperous before China joined WTO 20 years ago? Wasn’t the American technology and generosity of inviting China into WTO that have boasted China’s economy to its current state? It’s better to suffer short term pain now than allow this China cancer to grow out of proportion.
When China roars...the stock market worldwide will fall. So Trump better understand that.
"China roars".... Bhahaha. Whatever your take on the trade conflict, its underlying causes, and whether it is justified or not, one thing is for sure. When it is over if China were to "roar" the only influence they will have is over the OTC and Penny Pharmaceuticals stocks. They better hurry up and make a deal before they burn all their state funds keeping their market afloat purely for public image.
his actions affect the world. A lot of businesses are interconnected now. US falls, other countries will follow. It’s inevitable.
in five to ten years time, China will become the new king on this world market. So Trump better understand, China is the defacto connector for the world's economies. When China sneezes, the world will catch a cold.
give me 50x zoom in camera!
the war is over, this is a truce
in reality, the trade war has just begun.
 war continues when it is possible to achieve a result. China deal is impossible
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