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China hits back on U.S. tariffs, Dow falls almost 500 points

04 April, 2018, 01:01 | Author: Samuel Sharp
  • Stocks rally on Amazon's rebound, dollar gains

The year started strong, but early gains evaporated as the markets entered a correction over interest rate jitters, fears of an escalating import tariff dispute between the United States and China, and a selloff in the tech sector.

The S&P 500 fell 58 points, or 2.2 percent, to 2,581, slightly above its low for the year reached February 8. Shares of other tech companies, including Facebook, Netflix, and Google's Alphabet, followed Amazon as it dropped after Trump tweeted that "only fools, or worse, are saying that our money-losing Post Office makes money with Amazon".

Shares of Boeing Co., for instance, continued their recent slide on Monday, losing 1.7 per cent, as investors fretted about whether the US airplane maker, a major supplier to Chinese state-owned airlines, will have its wings clipped by retaliatory Chinese action. Walmart stock fell 3.8 per cent.

USA markets were closed Friday for the Good Friday holiday.

The Dow lost 694 points, or 2.9 percent, to 23,408. "Interest rates, the concern about tariffs, we're going to get into a trade war", said Doug Cote, chief market strategist at Voya Investment Management in NY. The Dow Jones rose 0.4% after popping more than 1% higher.

"The US markets will likely serve as a focal point as investors stateside and elsewhere consider what tact the administration will take toward trade in the weeks ahead and what effects it could have on the US economy and the economies of its trading partners", John Stoltzfus, the chief investment strategist of Oppenheimer & Co., wrote in a note to clients Monday.

The Dow plummeted over 700 points on Monday and the Nasdaq dropping 3 percent following President Donald Trump doubling down on his attacks on Amazon.


One test of Wall Street's mindset will come on Tuesday, when music streamer Spotify Technology SA goes public in an unusual direct listing.

BONDS: Bond prices recovered after an early dip. Silver fell 1.7 percent to $16.39 an ounce.

That tweet was enough to send Amazon shares down 7 percent, or $50 billion, in early morning trading last week.

Returning from the long Easter holiday weekend, Germany's DAX fell 0.8 percent while London's FTSE 100 declined 0.4 percent and France's CAC 40 dipped 0.3 percent. The yield on the 10-year Treasury stayed at 2.74 percent after a sharp decline last week.

The dollar edged down to 105.87 yen from Monday's 105.89 yen as currency traders shifted money into the Japanese currency, seen as a haven in times of market turmoil. "Amazon should pay these costs (plus) and not have them bourne [sic] by the American Taxpayer". Hong Kong's Hang Seng bucked the trend, ending up 0.2 percent.

COMMODITIES: Benchmark U.S. crude lost $1.71, or 2.7 percent, to $63.23 a barrel in NY. The euro edged up to $1.2308 from $1.2306. Brent crude, used to price global oils, slid $1.52, or 2.2 percent, to $67.82 a barrel in London.

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