Dow Jones down 724pts
FTSE 100 closes below 7,000
Trade war fears persist
US stocks were in free-fall by Thursday’s close and approaching the territory of a technical correction, with the Dow Jones dropping by 724 points to 23,958 as fears escalated about the possibility of a trade war between the US and China.
By the market’s close in NY, the Dow Jones had seen its worst day since the eighth of February and safe havens had come back into vogue, with the yield on ten-year US Treasury bonds falling six basis points to 2.83 per cent and gold futures seeing a 0.4% rise. The S&P 500 closed down 68 points at 2,643 and the Nasdaq also took a pummeling, dropping 178 points to 7,166. Up in Canada, meanwhile, the TSX lost 275 points to close at 15,399.
On the list of losers was Darden Restaurants (NYSE:DRI), the parent of OliveGarden and LongHorn Steakhouse, which lost 7.9% at US$85.94, after posting quarterly revenues in the third quarter that failed to impress Wall Street. Industrial metals groups were also hit, with United States Steel Corporation losing 11% at US$34.50 and Commercial Metals Company(NYSE:CMC) shedding 12.25% finishing off at US$20.91.
On the Dow, the companies faring worst included Caterpillar(NYSE:CAT), the tractor and farm equipment maker, which dropped 5.7% at US$146.90 and Boeing(NYSE:BA), which finished down 5.21% at US$319.61. The Facebook(Nasdaq:FB) rout over its alleged misuse of its members’ personal data, persisted and continued to weigh on the tech sector, with the social media giant finishing down 2.66% at US$164.89.
Earlier today, President Donald Trump put in place an executive memorandum that will place over US$50bln worth of tariffs on Chinese imports. This has sparked fears that China will retaliate and a trade war between the two countries will be launched.
This week, the Federal Reserve also hiked interest rates by twenty-five basis points as expected and its new chairman Jerome Powell said that it is increasing its forecast for likely rate hikes for next year, which adds to fears given that an additional three increases are expected this year.
MID-SESSION
US benchmarks show little hope of recovering in mid-day trade, with the Dow now down 402 points at 24,280 on the news that President Trump intends to place US$50bn in tariffs on China.
The S&P 500 has shed 31 points at 2,680 and the Nasdaq is off by 92 points at 7,253, as fears about a tit-for-tat trade war between the U.S. and China and worries about the direction of the US Federal Reserve’s monetary policy is headed spark further selling.
Twitter Inc (NYSE:TWTR) shares are also taking a pounding, shedding 3.8% at US$31.48 after its chief information security officer confirmed he is leaving the company. Fellow social media giant Facebook Inc (NASDAQ:FB) is also down for the fifth-consecutive session at 2.3% again at US$165.68 as the fallout from the Cambridge Analytica scandal and its improper use of its members' data widens.
Shares in Accenture PLC (NYSE:ACN), the accounting firm, are also being battered and are down 6.4 per cent at US$151.68 on the revelation that it's trimming its profit margin forecast.
In Toronto, the TSX is down almost 178 points at 15,497 while the FTSE 100 closed down below 7,000 at 6,953 for the first time since December of 2016 as traders still worry about the possibility of an interest rate hike in May, despite the Bank of England’s decision to keep rates intact today.
Canadian explorer BlackRock Gold Corporation (CVE:BRC) is one of the few groups with good news on Thursday; its shares held study at C$0.13 after its deal to acquire the Silver Cloud project in Nevada was given the as the go-ahead from the Venture Exchange.
OPEN
US benchmarks are a sea of red at the open in New York, with the Dow Jones plunging around 236 points at 24,446.
The S&P 500 is off over 23 at 2,688, while the tech heavy Nasdaq, which has seen a battering in recent days, shed almost 68 points at 7,277.
In London, FTSE 100 is down over 101 points at 6,937 as the blue-chip benchmark fell below the 7,000 level as traders fretted over a possible interest rate hike in May , although the Bank of England kept rates on hold today at a policy meeting.
Yesterday, the US central bank decided to lift rates as it pursues a program of monetary tightening as the economy strengthens.
In corporate news today in the USA, Facebook (NASDAQ:FB) shares were again taking a hit and its stock is reportedly on track for its biggest weekly percentage drop since March 2014 as the data scandal seemingly wont go away.
Shares on Thursday are down 1.18% to stand at US$167.42 currently.
Elsewhere, shares in Abbvie Inc (NYSE:ABBV) tanked over 11% to US$100.07 as the drugs group said it would not try for accelerated approval of rovalpituzumab tesirine in third-line relapsed/refractory small cell lung cancer due to the results of a phase 2 trial.