Published: Mon, April 09, 2018
Tech | By Dwayne Harmon

U.S. stocks ended week with deep sellof on trade war worries

U.S. stocks ended week with deep sellof on trade war worries

The Dow Jones industrial average closed 572 points down, or around 2.3%.

Earlier this week, the Trump administration announced plans for tariffs on $50 billion worth of Chinese goods in retaliation for China's alleged theft of USA intellectual property.

However, the U.S. Department of Labor said today (April 6) that only 103,000 jobs were created.

At the closing bell Friday, the Dow was 10 percent below the all-time high it reached in January.

The S&P 500, which many index funds track, lost 69 points, or 2.6 percent, tat 23,933, rebounding from 704 points down at 3 p.m., EST. Caterpillar declined 1.3 percent and Deere dropped about 2 percent.

USA businesses have been bracing for the impact of tariffs and have urged Trump to tread carefully with protectionist trade policies.

Experts say the latest threat from China - a plan for tariffs on $50 billion worth of U.S. exports - could be an effort to push the United States into negotiating a deal to defuse the trade spat. China said it would "counterattack with great strength" if he that happens.

Trump, who had been a cheerleader for the rising stock market, acknowledged in a radio interview aired Friday that the trade friction could take a toll on the market.

China's commerce ministry responded to the latest tariff threat by saying it will respond with countermeasures if needed.

U.S. government bond prices declined as global stocks rallied, lifted by bets that that negotiations would soften the blow of announced trade tariffs. Stocks plunged on Monday, but they rallied over the next few days as officials from both countries said they were open to talks and that the tariffs might never go into effect.

"I feel like this is a typical reaction, but I think that it will come back around", said Zach Holt.

Jason Pride, chief investment officer for Glenmede's private client business, said Trump's latest order caught investors off guard.

The trade tensions overshadowed the latest United States jobs report, which showed hiring cooled by more than forecast in March.

Stocks were mostly unaffected by the March jobs report, which showed that the USA economy added 103,000 positions, down from a much bigger gain in February and well below what analysts were expecting.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests U.S. 500 prices may continue to rise.

The S&P 500 index showed four new 52-week highs and one new low, while the Nasdaq recorded 47 new highs and 24 new lows.

During the regular session, the Dow .DJI and the S&P 500 .SPX posted gains for a third day in a row, the longest streak in about a month, as investors' worries of an escalating trade conflict between the United States and China began to ease.

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