Stocks drop again as US and China trade dispute escalates

Stocks drop again as US and China trade dispute escalates
The Associated Press

NEW YORK (AP) — Stocks are sinking again after the U.S. and China each announced tariffs on goods exported by the other, a move that increased investors’ worries over a trade dispute that could slow down global commerce. The Dow Jones industrial average fell as much as 501 points as industrial and large technology companies took some of the worst losses.

The Chinese government issued a $50 billion list of more than 100 U.S. goods including soybeans, the largest U.S. export to China, and aircraft targeted for a possible 25 percent tariff hike. The duties could drive up costs for companies that make airplanes and machinery as well as airlines, and automakers are targets as well. Beijing’s list reflects its sensitivity to American complaints that it pressures foreign companies to hand over technology.

The Chinese Commerce Ministry said the date the tariff hikes take effect depends on whether the U.S. actually moves to raise its duties. Late Tuesday the Trump administration outlined proposed tariffs on a similar amount of Chinese goods. It released a list of 1,300 imported Chinese products, including industrial robots and telecoms gear, to protest Beijing’s alleged theft of U.S. technology. China’s envoy to the WTO said Beijing would challenge the U.S. moves.

The S&P 500 index fell 31 points, or 1.2 percent, to 2,582 as of 9:45 a.m. Eastern time. The Dow Jones industrial average dropped 428 points, or 1.8 percent, to 23,605. The Nasdaq composite declined 85 points, or 1.2 percent, to 6,856. The Russell 2000 index of smaller-company stocks retreated 14 points, or 1 percent, to 1,497.

Industrial companies were rocked. Aerospace company Boeing shed $14.07, or 4.3 percent, to $316.75. Farm equipment maker Deere lost $7.35, or 4.8 percent, to $145.69 and construction equipment maker Caterpillar fell $4.82, or 3.3 percent, to $140.24. Large technology companies also struggled. They led the market higher throughout 2017 and 2018 but have fallen out of favor during the recent turmoil. Facebook slid $3.35, or 2.1 percent, to $152.76 and Microsoft sank $1.40, or 1.6 percent, to $88.31. Online retailer Amazon gave up $26.81, or 1.9 percent, to $1,364.85.

European stocks also fell sharply. Germany’s DAX fell 1.2 percent while France’s CAC 40 was down 0.9 percent. The FTSE 100 in Britain was 0.5 percent lower.

Hong Kong’s Hang Seng slumped 2.2 percent with the decline accelerating in the final minutes of trading after Beijing announced specifics of its tariff hikes. Most other Asian indexes had closed when China announced its response to the U.S. tariff plans. Japan’s benchmark Nikkei 225 crept 0.1 percent higher but South Korea’s Kospi slid 1.4 percent as the won weakened from the 3 ½ year high it touched against the dollar earlier this week.

After a big drop Monday and a recovery Tuesday, the S&P 500 is down more than 2 percent this week. It’s down almost 5 percent since March 1 as investors have focused on tariffs as well as controversies surrounding technology companies including Facebook.

Bond prices were little changed. The yield on the 10-year Treasury note held steady at 2.77 percent. The price of gold jumped 0.7 percent, to $1,347.20 an ounce.

The dollar slipped to 106.34 yen from 106.61 yen. The euro rose to $1.2295 from $1.2267.

A barrel of U.S. crude fell $1.28, or 2 percent, to $62.23 a barrel in New York while Brent crude, used to price international oils, fell $.05, or 1.5 percent, to $67.07 a barrel in London.

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AP Business Writer Kelvin Chan contributed from Hong Kong.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay

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