United States stocks plunge amid trade tensions

Wall Street is poised for its worst year since the financial crisis as worries about trade wars and higher interest rates dent sentiment. AFP  File  Bryan R. Smith

Stocks had fallen in afternoon trading as fears that an escalating trade war between the US and China may stifle global economic growth.

Stocks overcame a big loss on Wall Street Wednesday, though the market's recovery left plenty of signs of worry among investors that the fallout from the trade war between the US and China will spread.

On Wall Street, stocks suffered their biggest loss since December.

Eastern time. The Dow Jones Industrial Average rose 195 points, or 0.8%, to 25,913.

The S&P 500 was down 20.97 points, or 0.73 per cent, at 2,860.80 while the Nasdaq Composite was down 33.21 points, or 0.42 per cent, at 7,800.06.

The Toronto Stock Exchange's S&P/TSX fell 105.38 points, or 0.64%, to 16,271.66 on Friday.

Meanwhile Beijing appeared to be prepared to tolerate more currency weakness that could further distress the trade conflict with Washington after China allowed the yuan breach the key 7-per-dollar level for the first time in more than a decade today.

The S&P technology index, which includes companies that have a big exposure to China and were at the heart of Monday's sell-off, provided the biggest boost to the S&P index, rising 1.61 per cent. Apple and Bank of America each fell 5%.

Bond prices continued to rise sharply Wednesday, sending yields to their lowest level in almost three years.

Experts explain this by the ever increasing concern over the escalating US-China trade war and its impact on the global economy. The top USA index lost more than 700 points at times during trading Monday.

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The S&P 500 fell 93 points, or 3.2%, to 2,837. Wholesale gasoline fell 3 cents to $1.69 per gallon.

USA stocks traded lower Wednesday as traders continued to worry about the continuing effects of the trade battle with China.

Walt Disney Co. dropped 5 per cent after its quarterly earnings missed analysts' forecast on higher investments in its streaming platform.

The yuan is not freely convertible and the Chinese government limits its movement against the United States dollar to a two percent range on either side of a central parity rate that the central bank sets each day to reflect market trends and control volatility.

"Investors are very much concerned about the trade war and its expansion and that's certainly being manifested in the price to gold", Peter Cardillo, chief market economist at Spartan Capital Securities in NY, said, adding that nonetheless "investors need to be prudent and cautious".

The Dow dropped 22.45 points, or 0.1%, to 26,007.07.

New Zealand's NZX 50 Index climbed 1.4% after the Reserve Bank of New Zealand cut interest rates by 50 basis points to bolster the economy.

Bond prices rose and the price of gold jumped to a six-year high Wednesday as investors sought safety.

Last week, President Donald Trump rattled markets when he promised to impose 10% tariffs next month on all Chinese imports that haven't already been hit with tariffs of 25%.

Industrial and financial stocks posted the biggest drops early Monday. It dropped $2.71 the previous session to $56.23.

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