Wall Street sinks further as trade woes persist

A commuter walks on Wall Street across from the New York Stock Exchange January 10, 2019. — Reuters pic
A commuter walks on Wall Street across from the New York Stock Exchange January 10, 2019. — Reuters pic

NEW YORK, May 23 — Wall Street plunged at the open of trading today as investors shuddered at worldwide political, economic and trade turmoil.

About 15 minutes into the session, the benchmark Dow Jones Industrial Average and tech-heavy Nasdaq each lost 1.5 per cent, falling to 25,401.22 and 7,632.94, respectively.

The broader S&P 500 dropped 1.3 per cent to 2,818.80.

“The main story line is that the market is finding more reason to think the ‘little squabble’ with China over trade is about more than trade and will presumably carry on for some time without a solution,” Briefing.com analyst Patrick O’Hare wrote.

Chinese officials today berated Washington for “bullying” Beijing on trade, and called for a show of US “sincerity” before talks could resume to end the escalating trade war.

In another area of friction, US Secretary of State Mike Pompeo in comments on CNBC reaffirmed Washington’s hardline position on the blacklisted Chinese telecoms firm Huawei. He called the firm a national security threat and accused the company of lying about its ties to the government in Beijing.

Meanwhile, the International Monetary Fund warned that the US-China trade war threatens to jeopardise the global recovery, and could subtract about a third of a percentage point from GDP growth if Washington carries out a threat to put tariffs on virtually Chinese imports.

Further dampening the mood was gloomy economic and political news out of the EU: A survey showed German business confidence in May hit its lowest level in more than four years, while anticipation that British Prime Minister Theresa May could resign imminently exacerbated Brexit anxieties.

Among individual companies, electronics retailer Best Buy was down 4.8 per cent despite posting better-than-expected earnings as the company faces the brunt of rising import duties in the US-China trade war.

Meanwhile, medical device manufacturer Medtronic gained 1.8 per cent after beating earnings expectations. — AFP