Brutal week: Dow plunges 1,150 points

Worries about the US-China trade war unleashed another round of heavy selling on Friday, capping off a bruta...

Posted: Dec 8, 2018 9:05 AM
Updated: Dec 8, 2018 9:05 AM

Worries about the US-China trade war unleashed another round of heavy selling on Friday, capping off a brutal week on Wall Street.

The Dow fell 559 points, or 2.2%, on Friday as investors were left confused by conflicting messages coming out of the White House on the trade negotiations with China. The index was down as much as 663 points at one point.

Banking, finance and investments

Business, economy and trade

Economic policy

Economy and economic indicators

Financial markets and investing

Securities trading

Stock markets

Trade and development

Trade regulation and policy

Asia

China

Continents and regions

Donald Trump

East Asia

Government and public administration

Government bodies and offices

International trade

International trade law

Misc people

Peter Navarro

Political Figures - US

Politics

Tariffs and customs

US federal government

White House

Larry Kudlow

Wall Street

North America

The Americas

United States

Economic indicators

Stock indexes

The Nasdaq closed with a loss of 3.1%, while the S&P 500 retreated 2.3%.

For the week, the Dow plunged 1,150 points, or 4.5%. It was the index's worst week since March.

Stocks had been trading higher earlier Friday, but the market turned sharply lower after Trump administration officials seemed to contradict each other on trade.

While White House economic adviser Larry Kudlow sounded an optimistic note about China talks on CNBC, trade adviser Peter Navarro was simultaneously warning on CNN of higher tariffs if issues aren't resolved during a 90-day negotiating period.

"We've gotten a hodge-podge of mixed messages from people in the same administration," said Art Hogan, chief market strategist at B. Riley FBR. "We're not sure who we're supposed to listen to."

Worries about the negative consequences of the trade war and hopes for progress have launched Wall Street on a wild ride of late. The US-China ceasefire sent stocks soaring on Monday. But doubts about the truce helped knock the Dow nearly 800 points into the red on Tuesday. And then the Dow plunged 785 points on Thursday before staging a huge comeback.

"It doesn't feel like much of a ceasefire," said Ed Yardeni, president of investment advisory Yardeni Research.

Investors also received a softer jobs report on Friday. The Labor Department said the United States added 155,000 jobs in November, missing expectations for a gain of 200,000. But the labor news did not trigger a selloff and some traders likely figured the slowdown in hiring will reduce pressure on the Federal Reserve to raise interest rates.

Good-cop, bad-cop

Senior administration officials have alternated between good-cop and bad-cop on the trade front.

Kudlow told CNBC on Friday that the trade talks with China are "extremely promising."

Kudlow, director of Trump's National Economic Council, said that Trump has indicated he might be willing to extend the 90-day negotiating window if there's "good, solid movement and good action."

Navarro, the trade hawk of the White House, struck a different tone on CNN. Asked whether the administration would walk away if issues with China are not resolved within 90 days, Navarro suggested Trump would "simply raise" existing tariffs on $200 billion worth of Chinese goods.

If China fails to change its ways on trade, "we have a president that's going to stand up to that for once," Navarro said.

Navarro also championed the nearly $12 billion that the United States has raised from tariffs, even though that money is being mostly paid by American consumers and businesses.

The comments didn't lift the uncertainty on Wall Street. Trade-sensitive stocks including Apple (AAPL), Boeing (BA) and Caterpillar (CAT) retreated more than 2%.

"We keep getting conflicting reports out of those guys," said Joe Saluzzi, co-head of trading at Themis Trading. "The markets are confused."

Trade policy has hurt markets

JPMorgan Chase estimated on Friday that the White House's trade agenda may have erased up to 10% of the S&P 500's value this year.

"The risk that many market participants underestimated this year was the destabilizing impact of the US administration's trade policies," Marko Kolanovic, global head of quantitative and derivatives strategy at JPMorgan Chase, wrote to clients.

Trump himself has added to the confusion. While Trump has spoken of a desire to make a deal with China, the president also alarmed some investors by calling himself a "Tariff Man" on Twitter on Tuesday. That tweet was blamed for helping to send the market plunging.

Yet on Thursday evening, Trump said on Twitter that he agrees with a recent encouraging statement from China expressing confidence of a trade agreement within 90 days.

"Today is a microcosm of what we've had all week: mixed messages," said Hogan. "Every message has contradicted itself."

Hogan pointed to the confusion over a central issue: when the 90-day clock on negotiations began. At first, Kudlow suggested the period began on January 1. The White House later corrected Kudlow to clarify that 90 days began the date of the dinner, December 1.

The stock market would have dropped more on Friday if it weren't for a rally in the energy sector. Oil stocks like EOG Resources (EOG) and Anadarko Petroleum (APC) were bid higher after OPEC and its allies reached a deal to significantly cut production. US oil prices closed 2% higher on the news.

Lafayette
Clear
29° wxIcon
Hi: 34° Lo: 9°
Feels Like: 29°
Kokomo
Partly Cloudy
27° wxIcon
Hi: 31° Lo: 11°
Feels Like: 20°
Rensselaer
Clear
27° wxIcon
Hi: 31° Lo: 9°
Feels Like: 21°
Lafayette
Clear
29° wxIcon
Hi: 31° Lo: 9°
Feels Like: 29°
Danville
Clear
28° wxIcon
Hi: 33° Lo: 9°
Feels Like: 21°
Frankfort
Partly Cloudy
27° wxIcon
Hi: 33° Lo: 9°
Feels Like: 19°
Frankfort
Clear
27° wxIcon
Hi: 31° Lo: 9°
Feels Like: 19°
Monticello
Clear
26° wxIcon
Hi: 33° Lo: 10°
Feels Like: 21°
Monticello
Clear
26° wxIcon
Hi: 32° Lo: 11°
Feels Like: 21°
Logansport
Clear
27° wxIcon
Hi: 31° Lo: 11°
Feels Like: 21°
One of the coldest nights of the winter (so far) is ahead tonight.
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 605426

Reported Deaths: 9642
CountyCasesDeaths
Marion836221331
Lake45189680
Allen32646547
Hamilton29240315
St. Joseph27260380
Elkhart24354344
Vanderburgh19292248
Tippecanoe17905133
Johnson14974293
Porter14707168
Hendricks14295248
Madison10909220
Vigo10688179
Clark10581139
Monroe9338110
Delaware9089134
LaPorte9007162
Howard8177143
Kosciusko803182
Warrick668798
Hancock6639104
Bartholomew6443100
Floyd6377109
Wayne6106161
Grant5965115
Dubois554079
Boone549467
Morgan535595
Henry505564
Marshall502684
Cass482663
Dearborn476245
Noble471257
Jackson421947
Shelby413881
Lawrence389179
Clinton372043
Gibson369159
DeKalb345964
Harrison345644
Montgomery343354
Knox334339
Miami319844
Steuben313045
Whitley304526
Wabash301447
Adams299635
Ripley297545
Putnam294149
Huntington290659
Jasper288134
White272242
Daviess266774
Jefferson262538
Decatur246583
Fayette246348
Greene239262
Posey238128
Wells234050
LaGrange227662
Scott223439
Clay221832
Randolph212848
Jennings197736
Sullivan191133
Spencer190121
Washington183722
Fountain183127
Starke174843
Jay167022
Owen163637
Fulton163130
Orange157234
Carroll156415
Rush154418
Perry152727
Vermillion148634
Franklin147833
Tipton131832
Parke13038
Pike116226
Blackford110922
Pulaski96837
Newton90721
Brown87534
Benton86510
Crawford7929
Martin73013
Warren6777
Switzerland6575
Union6267
Ohio4867
Unassigned0375

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events