Wall Street reels as Dow Jones falls over 800 points

Andrew Cummings
December 7, 2018

Stock prices tumbled Tuesday amid investor fears about trade, wiping out the gains that followed the Trump administration's decision to delay higher tariffs on imports from China.

USA stocks veered sharply lower in afternoon trading today, pulling the Dow Jones Industrial Average down 700 points. The Nasdaq Composite fell by 283 points or 3.8% while the S&P 500 Index fell by 90.3 points or 3.2%. The Nasdaq Composite .IXIC dropped 33.57 points, or 0.45 percent, to 7,407.95 at the opening bell.

On the other hand, China's Commerce Ministry said on Wednesday that the G-20 talks were "very successful" and that it was "confident" a deal could be reached within the next 90 days.

Bond prices rose sharply. The Russell 2000 index gave up 68.20 points, or 4.4 percent, to 1,480.76.

The US stock and bond markets will be closed on Wednesday to mourn the death of former US President George H.W. Bush.

Trade bellwethers Boeing Co's 3.6% drop and Caterpillar Inc's 5.7% retreat weighed the most on the Dow, while twin declines of 3.7% in Amazon.com Inc and Apple Inc dragged on the Nasdaq and S&P.

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. The yield on five-year Treasury bonds has fallen below the yield on a three-year bond for two days running, meaning that U.S. investors are being paid more to hold government debt that matures in three years than in five years.

OPEC'S MOVE: OPEC countries gathered Thursday to find a way to support the falling price of oil, with analysts predicting the cartel and some key allies, like Russian Federation, would agree to cut production by at least 1 million barrels per day. Seoul's Kospi shed 0.6 percent to 2,102.17 and benchmarks in Taiwan, New Zealand and Southeast Asia also declined. Brent crude, the global standard, added 0.9 percent to $62.22 per barrel in London.

The dollar weakened to 112.82 yen from 113.69 yen late Monday. A report issued Tuesday from a Swiss freight company noted that global trade grew just 0.3 percent last month, compared to 3.1 percent for November 2017. The euro was little changed at $1.1342.

AutoZone climbed 5.6 percent to $870.65 after the auto parts retailer delivered third-quarter earnings that exceeded analysts' forecasts. Shares also fell in Taiwan and all other regional markets. Germany's DAX lost 1.1 percent, while France's CAC 40 dropped 0.8 percent.

Wholesale gasoline gained 0.8 percent to $1.44 a gallon.

The Dow lost 574 points, or 2.2 percent, to 25,253.

The commodity was further boosted as the Canadian province of Alberta announced an 8.7 percent cut in oil production due to a glut of oil stuck in storage tanks.

The S&P 500 lost 63 points, or 2.3 percent, to 2,727.

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