Reasons Why The Dow Plunged 700 Points

Javier Stokes
April 4, 2018

Trump also threatened the North American Free Trade Agreement over the weekend, while China on Monday responded to the White House's tariffs by imposing new taxes on US imports like pork and fruits, moves that sent shockwaves through the markets.

Stocks closed sharply lower on Wall Street as technology companies took heavy losses and investors anxious about escalating trade tensions with China.

The S&P 500 index skidded 58.99 points, or 2.2 percent, to 2,581.88.

Investors are nervous for good reason, since Monday's tumble left the S&P 500 closed below its 200-day simple moving average for the first time since June 2016. Boeing (BA) slid $6.14, or 1.9 percent, to $321.74, while industrial giant Caterpillar (CAT) fell 2.75 percent to $143.33. The Dow and S&P 500 are in correction territory.

Shares of Amazon traded 0.7 percent stronger as of 1.55pm in NY, having fluctuated between gains and losses earlier in the day, as investors tried to assess the impact of US President Donald Trump's latest criticising tweets about the company. The index lost 3%, which is set to be its biggest one-day percentage drop since February 8, as well as its sixth daily drop of the past eight sessions. Elsewhere, Seoul's Kospi ended down 27 points at 2,442.43.

China's latest step is just one point of contention between China and Washington, Europe and Japan over a state-led economic model they complain hampers market access, protects Chinese companies and subsidizes exports in violation of Beijing's free-trade commitments. Investors are also dumping some of their recent favorites, including technology companies like Microsoft, and Amazon, the target of numerous critical tweets from President Donald Trump over the last few days.

Brent crude, used to price global oils, rose 16 cents to $67.80 in London. Trump repeatedly criticized the company lately over issues including taxes and Amazon's shipping deals with the U.S. Postal Service. Technology companies including Oracle, Apple and Google parent Alphabet moved higher even though they weren't doing as well as the rest of the market.

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Mike Meylan, a New Zealand mathematics professor visiting Cambridge University, brought his children to explain Hawking's genius. His 1998 A Brief History of Time is recognised globally as the scientist's seminal work on the origins of the universe.

Amazon fell another $70.84, or 4.9 percent, to $1,376.50. Starting Monday, China is increasing the tariff rate on eight imported USA products, including pork, by 25 percent. He then proceeded to exempt most major USA trading partners from the levies, leaving the bulk of the measures aimed squarely at Beijing.

Snap's stock fell 8.9 percent Monday.

The electric automaker's losses extend last week's near 14-per cent decline as investigations of a fatal California crash and a Moody's credit downgrade weighed on the stock.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.78 per cent.

Energy companies skidded as benchmark USA crude lost $1.93, or 3 percent, to $63.01 a barrel in NY. The Nasdaq rose 2.3%, closing higher for the seventh quarter in a row.

CURRENCIES: The dollar declined to 105.99 yen from 106.50 yen. Natural gas picked up 1 cent to $2.70 per 1,000 cubic feet. The euro edged up to $1.2308 from $1.2306.

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