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Stocks slide as Wall Street fears worsening US-China trade spat

Tuesday, June 19, 2018

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WALL Street was sharply lower at the open on Monday as the spiralling trade dispute between Beijing and Washington weighed on global stocks.

China on Friday vowed to slap tariffs on up to US$50 billion in US imports, including crude oil, retaliating like-for-like against US tariffs on Chinese goods announced the same day by President Donald Trump.

Ten minutes into the day's trading, the benchmark Dow Jones Industrial Average was about a full percentage point down at 24,841.95, putting the index on track for a five-day losing streak. Meanwhile, the broader S&P 500 and tech-heavy Nasdaq had both fallen 0.8 per cent to 2,758.57 and 7,681.37, respectively.

Aircraft giant Boeing was down 0.7 per cent and heavy equipment manufacturer Caterpillar had slumped 1.7 percent. Both are Dow components seen as exposed to foreign trade.

Patrick O'Hare of Briefing.com said trade worries had in recent days tended to spark lower opens, with stocks recovering somewhat during the day as investors gained their footing.

However, last Friday saw additional buying as many stock options expired that day, providing support that the markets would likely do without on Monday.

Perhaps “today is the market's true self following a weekend of reflection on some clearly negative trade headlines”, he wrote.

Oil prices were holding steady in New York following China's tariff decision and ahead of Friday's meeting of the Organization of the Petroleum Exporting Countries, which is due to address market supply.

US media giant Disney had fallen 1.5 per cent after analysts downgraded the company to “sell” on fears that a bidding war it is fighting with Comcast for the assets of 21st Century Fox would leave Disney in a lose-lose situation: pay too much or fail to capture needed new business.

Shares in Chinese e-retailer JD.Com jumped 2.3 per cent following news that Google parent Alphabet had invested US$550 million in the company.

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