Brutal week: Dow plunges 1,150 points

Worries about the US-China trade war unleashed another round of heavy selling on Friday, capping off a bruta...

Posted: Dec 8, 2018 8:05 AM
Updated: Dec 8, 2018 8:05 AM

Worries about the US-China trade war unleashed another round of heavy selling on Friday, capping off a brutal week on Wall Street.

The Dow fell 559 points, or 2.2%, on Friday as investors were left confused by conflicting messages coming out of the White House on the trade negotiations with China. The index was down as much as 663 points at one point.

Banking, finance and investments

Business, economy and trade

Economic policy

Economy and economic indicators

Financial markets and investing

Securities trading

Stock markets

Trade and development

Trade regulation and policy

Asia

China

Continents and regions

Donald Trump

East Asia

Government and public administration

Government bodies and offices

International trade

International trade law

Misc people

Peter Navarro

Political Figures - US

Politics

Tariffs and customs

US federal government

White House

Larry Kudlow

Wall Street

North America

The Americas

United States

Economic indicators

Stock indexes

The Nasdaq closed with a loss of 3.1%, while the S&P 500 retreated 2.3%.

For the week, the Dow plunged 1,150 points, or 4.5%. It was the index's worst week since March.

Stocks had been trading higher earlier Friday, but the market turned sharply lower after Trump administration officials seemed to contradict each other on trade.

While White House economic adviser Larry Kudlow sounded an optimistic note about China talks on CNBC, trade adviser Peter Navarro was simultaneously warning on CNN of higher tariffs if issues aren't resolved during a 90-day negotiating period.

"We've gotten a hodge-podge of mixed messages from people in the same administration," said Art Hogan, chief market strategist at B. Riley FBR. "We're not sure who we're supposed to listen to."

Worries about the negative consequences of the trade war and hopes for progress have launched Wall Street on a wild ride of late. The US-China ceasefire sent stocks soaring on Monday. But doubts about the truce helped knock the Dow nearly 800 points into the red on Tuesday. And then the Dow plunged 785 points on Thursday before staging a huge comeback.

"It doesn't feel like much of a ceasefire," said Ed Yardeni, president of investment advisory Yardeni Research.

Investors also received a softer jobs report on Friday. The Labor Department said the United States added 155,000 jobs in November, missing expectations for a gain of 200,000. But the labor news did not trigger a selloff and some traders likely figured the slowdown in hiring will reduce pressure on the Federal Reserve to raise interest rates.

Good-cop, bad-cop

Senior administration officials have alternated between good-cop and bad-cop on the trade front.

Kudlow told CNBC on Friday that the trade talks with China are "extremely promising."

Kudlow, director of Trump's National Economic Council, said that Trump has indicated he might be willing to extend the 90-day negotiating window if there's "good, solid movement and good action."

Navarro, the trade hawk of the White House, struck a different tone on CNN. Asked whether the administration would walk away if issues with China are not resolved within 90 days, Navarro suggested Trump would "simply raise" existing tariffs on $200 billion worth of Chinese goods.

If China fails to change its ways on trade, "we have a president that's going to stand up to that for once," Navarro said.

Navarro also championed the nearly $12 billion that the United States has raised from tariffs, even though that money is being mostly paid by American consumers and businesses.

The comments didn't lift the uncertainty on Wall Street. Trade-sensitive stocks including Apple (AAPL), Boeing (BA) and Caterpillar (CAT) retreated more than 2%.

"We keep getting conflicting reports out of those guys," said Joe Saluzzi, co-head of trading at Themis Trading. "The markets are confused."

Trade policy has hurt markets

JPMorgan Chase estimated on Friday that the White House's trade agenda may have erased up to 10% of the S&P 500's value this year.

"The risk that many market participants underestimated this year was the destabilizing impact of the US administration's trade policies," Marko Kolanovic, global head of quantitative and derivatives strategy at JPMorgan Chase, wrote to clients.

Trump himself has added to the confusion. While Trump has spoken of a desire to make a deal with China, the president also alarmed some investors by calling himself a "Tariff Man" on Twitter on Tuesday. That tweet was blamed for helping to send the market plunging.

Yet on Thursday evening, Trump said on Twitter that he agrees with a recent encouraging statement from China expressing confidence of a trade agreement within 90 days.

"Today is a microcosm of what we've had all week: mixed messages," said Hogan. "Every message has contradicted itself."

Hogan pointed to the confusion over a central issue: when the 90-day clock on negotiations began. At first, Kudlow suggested the period began on January 1. The White House later corrected Kudlow to clarify that 90 days began the date of the dinner, December 1.

The stock market would have dropped more on Friday if it weren't for a rally in the energy sector. Oil stocks like EOG Resources (EOG) and Anadarko Petroleum (APC) were bid higher after OPEC and its allies reached a deal to significantly cut production. US oil prices closed 2% higher on the news.

Huntsville
Clear
73° wxIcon
Hi: 78° Lo: 71°
Feels Like: 73°
Florence
Clear
76° wxIcon
Hi: 87° Lo: 72°
Feels Like: 76°
Fayetteville
Few Clouds
72° wxIcon
Hi: 85° Lo: 71°
Feels Like: 72°
Decatur
Clear
73° wxIcon
Hi: 83° Lo: 71°
Feels Like: 73°
Scottsboro
Overcast
75° wxIcon
Hi: 82° Lo: 71°
Feels Like: 75°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Confirmed Cases: 46424

Reported Deaths: 1032
CountyConfirmedDeaths
Jefferson5486155
Montgomery4246105
Mobile4219136
Tuscaloosa234644
Marshall177011
Madison15548
Lee143337
Shelby135724
Morgan11285
Walker98525
Baldwin9809
Elmore96215
Dallas9109
Franklin90216
Etowah79013
DeKalb7615
Chambers64327
Autauga63612
Butler63228
Tallapoosa60469
Russell5680
Unassigned52226
Limestone5181
Houston5106
Lauderdale5016
Lowndes47821
Cullman4705
Pike4525
Colbert4266
St. Clair4162
Escambia4118
Calhoun3875
Coffee3863
Covington3727
Bullock36810
Barbour3572
Talladega3237
Marengo31711
Hale31521
Dale3020
Jackson3022
Wilcox2948
Sumter28512
Clarke2836
Winston2663
Chilton2622
Blount2511
Monroe2412
Pickens2386
Marion23613
Conecuh2177
Randolph2169
Macon1999
Choctaw19712
Bibb1961
Greene1868
Perry1791
Henry1363
Crenshaw1253
Washington1187
Lawrence1090
Cherokee1037
Geneva840
Lamar801
Fayette721
Clay692
Coosa591
Cleburne391
Out of AL00

Tennessee Coronavirus Cases

Confirmed Cases: 53514

Reported Deaths: 665
CountyConfirmedDeaths
Shelby12176202
Davidson11599127
Rutherford311136
Hamilton286736
Sumner167053
Trousdale15035
Williamson142015
Knox13098
Out of TN10958
Wilson99917
Putnam9197
Sevier8573
Robertson85511
Bradley7734
Unassigned7312
Lake6940
Tipton6535
Bledsoe6231
Montgomery5877
Bedford5847
Macon5004
Maury3793
Hamblen3744
Hardeman3574
Fayette3282
Madison3182
Loudon2931
Rhea2890
Blount2623
Dyer2613
McMinn24318
Cheatham2361
Dickson2190
Cumberland1884
Washington1820
Lawrence1726
Lauderdale1543
Jefferson1471
Anderson1432
Sullivan1412
Monroe1406
Gibson1331
Coffee1250
Smith1241
Greene1172
Obion1172
Hardin1157
Cocke1050
Marshall981
Haywood962
Franklin903
Wayne890
Hickman880
Warren810
Marion794
McNairy760
White763
Carter701
DeKalb700
Giles701
Lincoln680
Weakley661
Overton651
Hawkins642
Roane640
Grundy631
Unicoi550
Campbell541
Claiborne530
Carroll491
Henderson480
Grainger470
Polk460
Henry450
Johnson450
Sequatchie420
Crockett403
Cannon370
Chester370
Humphreys352
Perry350
Meigs320
Jackson300
Morgan281
Fentress240
Stewart240
Decatur220
Clay190
Union190
Scott180
Houston150
Moore150
Benton131
Hancock80
Van Buren70
Lewis60
Pickett60

 

 

Community Events