Wall Street losses deepen on growth, trade worries

Cornelia Mascio
Dicembre 6, 2018

The S&P 500 .SPX posted its biggest single-day percentage drop in about two months, giving back some gains from Monday and a week earlier, when the benchmark index tallied its largest weekly percentage gain in almost seven years.

"This trade issue is the big overhang, the biggest ceiling, if you will, to keeping the markets from moving higher", said Randy Frederick, vice president of trading and derivatives at Charles Schwab.

The Nasdaq composite lost 226 points, or 3 per cent, to 7,217.

The healthcare sector fell 3.3 per cent, the most among the 11 major sectors. The cannabis producer defended its Latin American operations from claims in a short-seller report on Monday that the company had overpaid for assets. The falls came on the back of doubts of a trade deal being reached between the USA and China. Citigroup fell 5.4 per cent to $61.63.

The Dow dropped 799 points, or 3.1 percent, to 25,027.

Apple lost 1.7 per cent early Tuesday and Bank of America was down 1.3 per cent.

"Cyclical sectors like technology, financials and industrials led markets lower, while defensive areas like utilities and real estate weathered the storm best". Advanced Micro Devices dropped 9.4 per cent to $21.49, while Micron Technology lost 6.4 per cent to $37.47. Toll Brothers also gave weaker-than-expected guidance for 2019, citing a slowing housing market. Though the S&P 500 Index closed higher on the suspension of tariff escalation, futures retreated Tuesday. Hovnanian Enterprises led most builders lower, giving up 10.3 per cent to $1.10.

Apple lost 2.2 percent and Bank of America slumped 3.7 percent.

Amid fears of slowing USA growth, Dollar General Corp sank 8% after warning that the proposed tariffs on Chinese imports could begin to have a greater impact on its business as well as its customers.

AutoZone climbed 5.6 per cent to $870.65 after the auto parts retailer delivered third-quarter earnings that exceeded analysts' forecasts.

ENERGY: Benchmark U.S. crude rose 38 cents to $53.63 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the global standard, added 1 percent to $62.28 per barrel in London.

CURRENCIES: The dollar weakened to 112.91 yen from 113.69 yen late Monday. The euro declined to $1.1330 from $1.1343. The British pound gained to $1.2746 from $1.2728 after a top official at the European Union's highest court advised that Britain can unilaterally change its mind about leaving the EU as scheduled on March 29.

Small-company stocks, which investors see as more risky than large multinationals, fell more than the rest of the market. The FTSE 100 index of leading British shares slid 0.6 per cent.

In Asia early Wednesday benchmarks fell by no more than 1.5 percent, the loss for the Hang Seng index in Hong Kong, which was at 26,860.43 by mid-morning. Japan's Nikkei 225 index gave up 2.4 percent and the Kospi in South Korea lost 0.8 percent. The S&P ASX/200 in Australia gave up 1 percent.

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