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US-STOCKS-MARKETS
Losses on Wall Street deepen amid trade war worries
NEW YORK, Dec 7, 2018 (BSS/AFP) – Losses on Wall Street deepened in late-
morning trade on Thursday as the arrest of a key Chinese executive at the
urging of the United States exacerbated trade war fears.
Near 1630 GMT, the Dow Jones Industrial Average was down 2.3 percent at
24,446.09 after earlier falling more than three percent. The blue-chip index
has lost almost 1,400 points in the last two sessions.
The broad-based S&P slid 2.0 percent to 2,645.74, while the tech-heavy
Nasdaq Composite Index shed 2.4 percent to 6,998.19.
The drops, which pushed both the Dow and S&P 500 into the red for 2018,
came after the arrest of Huawei executive Meng Wanzhou in Canada for
extradition to the United States in an investigation into suspected Iran
sanctions violations by the telecom giant.
The Meng arrest stirred tensions just as the United States and China agreed
to a ceasefire in their trade spat while negotiators seek a deal within three
months.
“The concept of getting a quick resolution is fading,” said Art Hogan,
chief market strategist at B. Riley FBR.
After rallying on Monday following the US-China ceasefire on tariffs
announced over the weekend, US markets had fallen sharply on Tuesday on
skepticism about the agreement.
US markets were closed on Wednesday because of the funeral of former
President George H.W. Bush but resumed their downward move on Thursday
following the Meng arrest.
Other headwinds facing stocks include worries over slowing US growth that
are prompting greater uncertainty on whether the Federal Reserve will
increase interest rates later this month.
Petroleum-linked stocks were also down amid a pullback in oil prices as
OPEC members debated a production cut.
Large banks were particularly weak, with Bank of America losing four
percent, Citigroup 5.6 percent and JPMorgan Chase 3.5 percent as investors
now view the odds of a Fed rate hike on December 19 at 69.8 percent, down
from 82.7 percent a week ago, according to futures markets.
Boeing also suffered outsized losses, shedding 6.2 percent on trade war
fears and as the aerospace giant continues to face scrutiny following an
October 29 accident in Indonesia in which 189 people died.
The head of the carrier, Lion Mentari Airlines, has reportedly threatened
to cancel orders of additional Boeing planes.
BSS/AFP/SR/1800 HRS