Dow Jones drops almost 800 points on fears of slowdown in economic growth
Wall Street closed Tuesday with heavy losses, its main indicator - the Dow Jones Industrial Average - plunging almost 800 points amid traders’ fears of a deceleration in US economic growth.
At the close of the day’s trading, the DJIA had lost 3.10 percent, or 799.36 points, ending the day at 25,027.07 points, while the S&P500 index gave up 3.24 percent, or 90.31 points, closing at 2,700.06.
The NASDAQ market composite, including the country’s most important tech firms, lost a noteworthy 3.80 percent, or 283.09 points, closing at 7,158.43.
By sectors, only public services rose - albeit by just 0.15 percent - while the financials lost 4.40 percent, with key banks like Bank of America and Citigroup being down by 5.43 percent and 4.40 percent, respectively.
Other sectors deep in the red on the day were industrials (-4.35 percent), nondurable goods (-3.91 percent) and technology (-3.86 percent).
There’s no doubt that it was a very bad day on the New York trading floor, with analysts attributing the nosedive in equities, in part, to a drop in the profitability of bonds and doubts about the effects of the tariff truce struck at the G20 Summit between the Trump administration and Beijing.
Three-year Treasury bonds on Monday exceeded 5-year bonds in terms of their return, a switch from the usual manner of trading that many analysts believe signals a coming recession, although it could be years away, but nevertheless it caused traders to begin dumping stocks on Tuesday morning.
Adding to the market uncertainty, earlier in the day Trump had tweeted that while he hoped that a comprehensive and lasting trade deal with China could be worked out, if that proves impossible then he wanted people to know that he is a “tariff man,” suggesting that he will impose significantly higher tariffs on Chinese imports after all.
Among the Dow components that lost big on Tuesday were Caterpillar (-6.93 percent) and Boeing (-4.85 percent), both of which do significant business with Beijing, along with Intel (-4.75 percent), DowDuPont (-4.51 percent), JPMorgan (-4.46 percent), Apple (-4.40 percent), Visa (-4.39 percent) and American Express (-4.20 percent).
In other markets, West Texas crude rose to $53.25 per barrel and gold jumped to $1,243.70 per ounce, while the 10-year Treasury bond fell to 2.914 percent and the dollar rose against the euro to $1.1341.