Dow Falls 391 Points Amid US-China Trade Woes, Hong Kong Protests

Marco Green
August 13, 2019

Stocks plunged alongside bond yields in a broad selloff amid mounting doubts that the US and China will reach a trade deal any time soon.

The Dow Jones Industrial Average .DJI fell 391 points, or 1.49%, to 25,896.44, the S&P 500 .SPX lost 35.96 points, or 1.23%, to 2,882.69 and the Nasdaq Composite .IXIC dropped 95.73 points, or 1.2%, to 7,863.41.

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Traders work on the main trading floor of the New York Stock Exchange shortly after the opening bell of the trading session in New York January 15, 2016.

The early losses come amid a mostly quiet day on Wall Street as the latest round of corporate earnings nears its end.

Benchmark 10-year Treasury yields were near the lowest in nearly three years, gold was pinned close to six-year highs, and the yen was within a whisker of a seven-month peak versus the dollar in a sign of the heightened anxiety in financial markets already battered by global growth woes.

Banks were also feeling trade heat with Bank of America and Goldman Sachs both losing more than 2%. The yield is used as a benchmark for interest rates on mortgages and other consumer loans. Investors usually seek the shelter of utilities and bonds when they want a more secure place to put their money because of concerns over economic growth.

Data on inflation, housing starts and retail sales are due later in the week, and will be scrutinized for further signs of economic softening.

Macy's reports quarterly results on Wednesday and Walmart will report results on Thursday.

The S&P 500 opened lower by 11.58 points, or 0.40%, at 2,907.07.

Shanghai Composit Index dropped 0.6%.

OVERSEAS: Stocks in Europe edged lower while indexes in Asia moved broadly higher.

Protests across Hong Kong, which began in June, were turning into the Asian financial hub's most serious crisis in years and one of the key challenges for Chinese leader Xi Jinping since he became the nation's leader back in 2012.

Stocks in Argentina nosedived following a round of primary voting that could drastically change the leadership of the country as it faces a deep economic crisis.

Indexes down: Dow 1.17%, S&P 1.06%, Nasdaq 1.00%. -China trade war continues to hover over the market and has taken stocks on a wild ride in August.

Investors are concerned Trump's new 10% tariff on China to be imposed September 1 will preclude any trade deal being made within the year while worsening the trade war.

Uncertainty as to whether China intends to weaponize the yuan down the road still remains and hasn't been deterred by the continuing weakening of the currency.

Elsewhere, the South Korean won extended declines as data signaled exports are set to drop as the impact of the US-China trade spat spreads. The company reaffirmed a solid 2019 forecast for gold production.

FEEDING GROWTH: Sysco rose 3.7% after the food distributor beat Wall Street's fiscal fourth quarter profit forecasts. Trump said Friday that it would be fine if U.S.

Other reports by Click Lancashire

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