Stocks plunge on worries over trade

Stocks plunge on worries over trade

Stocks plunge on worries over trade

Analysts say many investors are anxious about escalating trade tensions between the US and China, after US President Donald Trump made a decision to impose heavy tariffs on a broad range of imports from the world's number-2 economy.

In Toronto, the TSX is down nearly 178 points at 15,497 while the FTSE 100 closed down below 7,000 at 6,953 for the first time since December of 2016 as traders still worry about the possibility of an interest rate hike in May, despite the Bank of England's decision to keep rates intact today.

Industrial companies have also been hit by worries about trade because they face a combination of higher prices for imported metals that they use to make their machinery and potential restrictions on sales overseas.

The Dow Jones industrial average lost 424.69 points, or 1.8%, to 23,533.20.

The S&P index also dropped 2.5 percent Thursday along with the Nasdaq, which fell 2.4 percent.

The S&P 500 index dropped 68 points, or 2.5 percent, to 2,643. Bank of America, Citigroup and Morgan Stanley fell sharply.

Earlier this month the Trump administration ordered tariffs on imported steel and aluminum, and stocks dropped as investors anxious about the possibility of tougher restrictions on worldwide trade and smaller profits for corporations.

Construction equipment maker Caterpillar fell $8.90, or 5.7 per cent, to $146.90, for its worst loss since mid-2016.

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Not every company breaks out how much of its revenue comes from overseas, but FactSet estimates that 30.5 per cent of revenue at big companies in the S&P 500 comes from outside the United States.

Investors were further rattled when China's ambassador to the United States signaled that China could ease purchases of U.S. bonds in response to Trump's tariffs. All 11 primary sectors finished lower, with financials plunging more than 2%. The S&P 500 has dropped 1.9% to 2661.04, while the Dow Jones Industrial Average has tumbled 2.2% to 24,147.77. It's not clear which products will be hit, but the action is aimed at curbing China's troubling theft of USA intellectual property. Germany's DAX lost 1.7 percent and the CAC 40 in France shed 1.4 percent.

Canadian explorer BlackRock Gold Corporation (CVE:BRC) is one of the few groups with good news on Thursday; its shares held study at C$0.13 after its deal to acquire the Silver Cloud project in Nevada was given the as the go-ahead from the Venture Exchange. Trump himself has tweeted, saying trade wars are "good", and "easy to win".

The Dow dropped 425 points, or 1.8%, on Friday, sinking back into a "correction" - a decline of 10% from the all-time high in January. Powell indicated that the Fed would raise interest rates at least two more times this year. Tech companies are also among the companies that could be in the cross-hairs of a U.S.

On the Nasdaq, chipmaker Micron Technology fell more than 7% after reporting late Thursday a 213% earnings-per-share gain and a 58% rise in revenue, easily topping analyst targets. Tech stocks remain under pressure as Facebook reels from a user data crisis.

Wholesale gasoline remained at $2.01 a gallon.

CURRENCIES: The dollar fell to 105.70 yen from 106.10 yen. Heating oil added 3 cents to $2.02 a gallon.

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