The major market averages closed lower again on Wednesday as heightened fears of a trade war with China -- the largest holder of US debt -- spooked Wall Street and left the Dow and S&P 500 in the red for a third consecutive day. Led by losses in industrial and financial stocks, the Dow fell by more than 400 points before trimming some of its losses as support at its 100-day average remained intact. The S&P 500 found similar support at its 50-day moving average.
Selling erupted when the White House said it would increase its efforts to trim the US trade deficit with China by $100 billion. Fearful that any attempts to impose trade restrictions will trigger retaliatory actions by Beijing, the blue chip index turned a 125 point gain at the open into a 440 point loss with component stock Boeing ( BA ) responsible for a third of today's losses in the blue chip index.
Financial stocks also limped into the close, undermined by lower Treasury yields as the 10-year note richened from 2.85% at the open to 2.80% by midday, incurring heavy losses for shares of Goldman Sachs ( GS ) and JP Morgan ( JPM ) and leaving the financial sector of the S&P 500 1.33% lower at the close.
Stock futures were indicating a strong open with economic data adding to Wall Street's premarket gains. The February producer price index increased 0.2% for both the nominal and the core, in-line with expectations, but half of the gains reported in January.
Retail sales dropped 0.1%, well below estimates for a 0.4% gain, with sales excluding autos and gas also increasing by less than what was expected.
Finally, business inventories jumped 0.6% in January, matching a revised gain in December and exceeding +0.5% estimates. Sales, however, were down 0.2%, raising the inventory/sales ratio to 1.34 from 1.33 in December.
Thursday's economic calendar includes weekly jobless claims, the Philadelphia Fed and NY Fed business outlook indices, import and export prices, and the NAHB housing market index.
Here's where the markets stood at the close:
Dow Jones Industrial Index was down 248.91 (-1.00%) to 24,758.12
S&P 500 was down 15.83 points (-0.57%) to 2,749.48
Nasdaq Composite Index was down 14.20 points (-0.19%) to 7,496.81
FTSE 100 was down 0.09%
Nikkei 225 was down 0.87%
Hang Seng Index was down 0.53%
Shanghai China Composite Index was down 0.57%
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