US stocks plunge on China trade retaliation

Traders work on the floor at the New York Stock Exchange (NYSE) in New York May 6, 2019. ― Reuters pic
Traders work on the floor at the New York Stock Exchange (NYSE) in New York May 6, 2019. ― Reuters pic

NEW YORK, May 13 — Wall Street stocks plunged today, with losses on Nasdaq exceeding three per cent, after China announced it was ramping up tariffs on US goods, escalating the year-long trade dispute.

About an hour into the trading session, the Dow Jones Industrial Average was down nearly 530 points, or 2.0 per cent, at 25,412.74.

The broad-based S&P 500 dropped 2.1 per cent to 2,821.61, while the tech-rich Nasdaq Composite Index tumbled 2.7 per cent to 7,7022.21.

Beijing announced today said it will increase tariffs on US$60 billion worth of US goods from June 1, striking back after Washington more than doubled tariffs on US$250 billion in Chinese goods, and also started the process to impose punitive duties on the nearly all Chinese imports.

The editor of the party-owned Chinese newspaper Global Times said on Twitter that Beijing was considering additional actions, including dumping US Treasuries, ending US agricultural purchases and reducing orders for Boeing airplanes.

Boeing fell 3.4 per cent. A spokesman for the company said Boeing was “confident the US and China will continue trade discussions and come to an agreement than benefits both US and Chinese manufacturers and consumers.”

Other US companies with large China operations suffered big declines, including Apple, down 5.3 per cent, Caterpillar, down 4.3 per cent, Deere & Company, down 5.2 per cent, General Motors, down 3.2 per cent and Starbucks, down 2.2 per cent.

Apple also was hit by news the US Supreme Court will allow an antitrust lawsuit against the iPhone maker to go forward.

The broader market retreat indicated growing concern that talks between the United States and China could fall apart.

US stocks posted a modest recovery on Friday following the conclusion of trade talks after both sides vowed to keep talking, even as they failed to strike a deal after months of back-and-forth, and the US tariff increase took effect.

Among other companies, Uber Technologies shed 8.0 per cent in its second trading session after faltering Friday in a market debut and closing below its initial public offering price. — AFP

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