Stocks fall again on rate worries, Dow loses 1.5%

Eileen GuzmanMar 06, 2018

US stocks took a beating in afternoon trading on Thursday after President Donald Trump announced stiff new tariffs on steel and aluminum imports.

The S&P 500 and the Dow also snapped a 10-month winning streak, closing out a month marked by spikes in volatility and fears that rising inflation would prompt the Federal Reserve to pick up the pace of interest rate hikes.

Investors had a different impression.

Canada's main stock index fell to a two-week low on Friday, weighed by declines in energy, financial and industrial shares as oil prices fell and global investors anxious about a trade war.

The gains on Friday came as investors who had been spooked by the prospect of a global trade war backed off those concerns and noted a trade war was far from certain at this point.

Shares of big USA steel companies and manufacturers were under pressure on uncertainty over the effects of tariffs.

The Dow Jones industrial average sank 223 points, or 0.9 percent, to 24,389. That means Apple and other big USA companies are dependent on customers not only in Peoria but also Paris and Peru. The Dow is up 1.25 percent this year. Eastern time. It was up as much as 0.6 percent and down as much as 1.2 percent in choppy trading earlier. It had only four such days past year. It's the third straight day where the index has lost at least 1 percent. The worst weekly loss of previous year was 1.4 per cent.

The Dow Jones industrial average dropped more than 500 points, or 2 percent, to 24,498.

"It would raise the price for the companies that use steel".

USA stocks had been higher earlier in the day after Federal Reserve chairman Jerome Powell testified before Congress that he does not see inflation in workers' wages "at a point of acceleration", easing trading anxieties following his comments earlier in the week many interpreted as a signal the Fed may raise rates more quickly than expected to beat down inflation. It was a continuation of the remarkably smooth rise that investors enjoyed in 2017.

The yield on the key 10 year bond fell to 2.86% on Wednesday and to around 2.802% on Thursday - a sign that investors are selling out of shares and commodities and heading for the safest haven of all - US Treasuries.

The SPI had been looking at a fall of 33 points just before Trump's announcement just after 5 am Sydney time, this then surged to a fall of 61 points, or more than 1% at the close. The 30-year yield, which moves more on expectations of future inflation, climbed to 3.11 percent from 3.09 percent.

The ASX 200 year to date was down 0.8% at the end of February - yesterday's fall took that to 1.5% and today's drop could push it well past 2%. EOG Resources fell 4 percent. The FTSE 100 in London gave up 1.2 per cent. Benchmark U.S. crude fell 65 cents to settle at $60.99 per barrel. Brent crude, the global standard, rose 34 cents to $64.17 per barrel.

Gold rose $18.80, or 1.4 percent, to $1,324.00 per ounce. Some investors took that as a signal that the Fed may get more aggressive about raising rates, which sent stocks down and Treasury yields higher.

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