Dow ends 2.2% lower to finish bruising week on Wall Street

Dow ends 2.2% lower to finish bruising week on Wall Street

Traders work on the floor of the NYSE in New York
Traders work on the floor of the New York Stock Exchange. (Photo: REUTERS/Brendan McDermid)

NEW YORK: Major US stock indices slumped more than two per cent on Friday (Dec 7) to conclude a bruising week for markets rattled by the US-China trade clash.

The Dow Jones Industrial Average ended down 558.72 points (2.24 per cent) at 24,388.95.

The broad-based S&P 500 slumped 62.87 points (2.33 per cent) to 2,633.08, while the tech-rich Nasdaq Composite Index tumbled 219.01 points (3.05 per cent) to 6,969.25.

The losses ended the worst week for US stocks since March and left both the Dow and S&P 500 in negative territory for the year.

The declines followed a mixed US jobs report that had initially helped lift stocks early in the session.

But the market quickly went negative, with the losses accelerating following hawkish comments from White House trade advisor Peter Navarro, who told CNN that US President Donald Trump would "simply raise" tariffs on US$200 billion worth of Chinese goods if trade talks fail.

US stocks had opened the week on a positive note after Trump and Chinese leader Xi Jinping agreed over the weekend on a ceasefire on new tariffs.

But sentiment soon shifted, especially following the US-initiated arrest of a top Chinese Huawei executive that was seen as exacerbating the US-China clash.

Huawei Chief Financial Officer Meng Wanzhou, who appeared in a Canadian court on Friday, faces US fraud charges related to sanctions-breaking business dealings with Iran.

"The market is kind of falling back into our interpretation of where we are in the US-China trade war," said Art Hogan, chief market strategist at B Riley FBR.

The Huawei arrest dampened expectations that the United States and China could quickly hash out a deal, Hogan added.

Adding to the investor unease is a growing sense that the market is due for a shift after a years-long push higher by US stocks.

"When you see a market go sideways this year after a 10-year bull market, you know that the bear market is not far," said Adam Sarhan of 50 Park Investments.

Most sectors were sharply lower on Wall Street, with industrials, consumer discretionary and technology all losing two per cent or more.

Losses among energy shares were comparatively small after an OPEC deal boosted oil prices. But shares of Chevron, ExxonMobil and others also finished the session in the red.