Published: Thu, December 06, 2018
Economy | By

USA markets sink on worries over slowing growth, trade truce outcome

USA markets sink on worries over slowing growth, trade truce outcome

Citigroup fell 4.5 percent to $62.26.

At 2 p.m, ET, The S&P 500 index slid 73 points, or 2.7 per cent, to 2,717. Ten-year yields are below 3 percent. The Nasdaq composite lost 3.8 percent to 7,158.43. The Dow Jones plunged nearly 800 points, while the S&P 500 was driven lower by financials, which shed nearly 4.4 per cent.

Canada's main stock index also fell on Tuesday, led by healthcare shares, while market sentiment was hurt by fading hopes of a swift resolution to the U.S.

Small-company stocks fell more than the rest of the market. The FTSE 100 index of leading British shares slid 0.4 percent.

The trade-sensitive industrial sector .SPLRCI fell 4.4 percent, with Boeing BA.N and Caterpillar CAT.N declining 4.9 percent and 6.9 percent, respectively. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks.

A note from S&P Global Ratings predicted that USA growth would slow from 2.9 per cent in 2018 to 2.3 per cent in 2019 and 1.8 per cent in 2020, adding that the U.S. was nearing the "latter" stages of a multi-year growth cycle.

The New York Stock Exchange and Nasdaq will be closed on Wednesday, for a day of mourning for former President George H.W. Bush, who died on Friday at the age of 94.

Bank of America fell 5.1 percent.

Brent crude, used to price worldwide oils, lost 63 cents to $61.45 per barrel in London.


Tuesday's losses more than erased the gains of the previous two trading days, when cautiously optimistic investors bid up stock prices amid hopes that US and China were resolving their trade dispute.

Technology companies, banks and industrial stocks accounted for much of the sell-off.

Apple lost 4.4 percent to $176.69 after the consumer electronics giant was downgraded by HSBC analysts, citing the possibility that iPhone volume and value growth may moderate due to a saturated mobile phone market. The Shanghai Composite index lost 0.5 percent to 2,653.54 and Australia's S&P ASX 200 dropped 1.3 percent to 5,641.10.

European markets fell on Tuesday, with Germany's DAX losing 1.1 percent and France's CAC 40 dropping 0.8 percent.

"Historically there is a good correlation between the yield curve inverting and the timing of the next recession and the bond market has been a big focus for today", said Binky Chadha, chief strategist at Deutsche Bank in NY.

HOUSING HICCUP: Homebuilders traded lower after luxury homebuilder Toll Brothers reported fiscal fourth-quarter earnings that topped Wall Street's forecasts, but also issued a cautious assessment of the housing market.

Apple lost 1.7 percent early Tuesday and Bank of America was down 1.3 percent.

Amid fears of slowing U.S. growth, Dollar General Corp sank 8% after warning that the proposed tariffs on Chinese imports could begin to have a greater impact on its business as well as its customers.

The S&P 500 index lost 8 points, or 0.3 percent, to 2,782.

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