Markets sell off, Dow plunges over 700 points as wild ride continues - Action News
Home WebMail Tuesday, November 26, 2024, 06:17 AM | Calgary | -17.5°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
Business

Markets sell off, Dow plunges over 700 points as wild ride continues

North American stock markets plunged in afternoon trading Friday after comments from the White House heightened the prospect of a global trade war and the subsequent risks to the economy.

Roller-coaster afternoon on Wall Street as industrial giants like Boeing see big losses

Markets started to take a steeper slide in the afternoon after White House officials said that there could be some fluctuations in stock markets as a result of the U.S.'s trade dispute with China. (Richard Drew/The Associated Press)

North American stockmarkets plunged in afternoon trading Friday after commentsfrom the White House heightened the prospect of a global trade war and the subsequent risks to the economy.

The Dow Jones industrial average fell as low as 23,738, dropping more than 700 points, or 3.1 per cent, before paring losses to close at23,932a slide of 573or 2.3 per cent.

The broader S&P 500 index lost2.2per cent to2,604, while the tech-heavy Nasdaq composite fell 2.3per cent to6,915points.

The Nasdaqwas the biggest loser of the week, falling more than two per cent, while the Dow lost 0.7 per cent and the S&P 500 was down 1.4 per cent.

Markets were down this morning after the Chinese government vowed to "counterattack with great strength" if U.S. President Donald Trump went ahead with plans of tariffs on an additional $100 billion worth of Chinese goods.

But stocksstarted to take a steeper slide in the afternoon afterWhite House officials said that there could be some fluctuations in stock markets as a result of the U.S.'s trade dispute with China.

Industrial giants like Boeing and Caterpillar were among the big losers, both losing over three per cent.

Trade tensions

Top economic adviser Larry Kudlowsaid that a solution to the trade dispute was possible within three months, but the tariffs werenot a bluff.

He added that China's response to the first tariff plan was "highly unsatisfactory."

Added to that, government data on Friday showed that theU.S. economy created thefewest jobs in six months in March, but risingwage gains pointed to atightening labour market, which should lead theFederal Reserveto further raise interest rates this year.

Federal Reserve chairman Jay Powell said it was too soon to knowif rising trade tensions would impactthe U.S.economy.

With volatility leading to wild swings in equities again this week, CIBCeconomist Royce Mendes told CBCthat the key thing investors need to keep in mind is that "the stock market is not the economy and the economy is not the stock market."

"Of course there's volatility, but fundamentally, theCanadianeconomy and the U.S. economy because it's so important to Canada, remains on solid footing," he said. "As longer term investors, that's something we should take into account when making decisions."

Oil falls

Meanwhile, along with the trade tensions, falling oil prices weighed on the Canadian market.

Benchmark West Texascrude oil fell 2.3 per cent in New York to $62.05 a barrel. Prices have fallen almost five per cent this week as fears rose that growing trade tensions would reduce oil demand as the global economy slowed.

In Toronto, the S&P/TSXcomposite index closeddownone per cent to15,207points, led by declines in materials and energy.

The Canadian dollar closed at an average of78.35 cents US, up 0.08 of a cent from Thursday.

With files from Reuters and Meegan Read