Dow dives more than 500 points on trade tensions

Randal Sanchez
April 7, 2018

The continued strength on Wall Street reflects easing concerns about a potential trade war between the USA and China, which have recently led to considerable volatility on Wall Street.

At 9.51am ET, the Dow Jones Industrial Average dropped 0.37 per cent to 24,414.88.

The market also seemed to take comfort from the fact that the effective date of China's move depends on when the USA action takes effect and Washington has a two-month window for public comment and consultation. While the U.K.'s FTSE 100 Index surged up by 2.4 percent, the French CAC 40 Index and the German DAX Index soared by 2.6 percent and 2.9 percent, respectively. President Donald Trump has proposed more tariffs on Chinese goods.

"The stock market is in a bit of a tug of war", says Allen Bond, portfolio manager of the Jensen Quality Growth Fund. Caterpillar fell 3.5 percent.

The U.S. and China have recently engaged in tit-for-tat tariff announcements, although traders seem optimistic that the threats are only a precursor to negotiations of a trade agreement between the two countries.

Separately, Brookstone Capital Management bought a new stake in shares of Direxion Daily S&P 500 Bull 1.25X Shares in the 4th quarter worth approximately $5,814,000. Boeing (BA.N), the single largest USA exporter to China, fell 2.5 percent.

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Earlier that morning, at 5:21 a.m., Cunningham's mother had received a text message from him, she has said . It gained so much attention that he CDC had to release a statement condemning the reports as false.

Investors will also tune into Fed Chairman Jerome Powell's speech at an event later in the day for signs the central bank could raise rates more than the expected two more times this year. Apple lost 1.4 percent and Boeing fell 2.6 percent.

Declining issues outnumbered advancers on the NYSE for a 1.41-to-1 ratio and for a 1.28-to-1 ratio favouring decliners on the Nasdaq.

The next chart highlights that the 10-year yield has spent the majority of the past 25-years inside of a falling channel.

Industrial companies were especially hard hit by the escalation in trade tensions Friday.

April 5 is a positive day so far for Rex Gold Hedged S&P 500 ETF (NYSEARCA:GHS) as the ETF is active during the day after gaining 0.953% to hit $32.515 per share.

The government reported that US employers added 103,000 jobs in March, a weaker pace than the last few months.

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