Stocks recovered in a late rally Thursday after nearly wiping out all gains for the year, capping a tumultuous trading day that reflected investors\u2019 persistent\u2026<\/b>
\nStocks recovered in a late rally Thursday after nearly wiping out all gains for the year, capping a tumultuous trading day that reflected investors\u2019 persistent jitters over the U. S. trade war with China and fears of a weakening global economy.
The Dow Jones Industrial Average fell more than 1,500 points in two days before paring Thursday\u2019s losses to 79 points, or 0.32 percent, to close at 24,948. The S&P 500 was down 0.15 percent, while the tech-heavy Nasdaq finished the day up 29.83 points, or 0.42 percent.
Analysts blamed a combination of worries over President Trump\u2019s trade war with China, low oil prices, concerns about the British parliament\u2019s ability to approve a Brexit deal and the arrest of a Chinese high-tech executive wanted by the U. S.
The president thought he had eased the concerns about tariffs last weekend, when he reached a handshake deal with Chinese President Xi Jinping for a 90-day pause in the trade war to implement specific agreements on certain exports such as oil and agricultural products.
But investors\u2019 worries appeared to accelerate Thursday, even after Beijing belatedly gave an upbeat confirmation of the unwritten agreement with the U. S.
The arrest of Meng Wanzhou, chief financial officer of the Chinese telecom giant Huawei, reinforced concerns about the difficulties of the U. S. and China reaching a comprehensive trade deal. Mr. Trump has accused China of stealing cutting-edge technology from the U. S.
\u201cYou have got the news overnight of the arrest of the CFO of Huawei that I think is throwing a real monkey wrench into the positive optimism that surrounded the weekend meeting,\u201d said Katie Nixon, chief investment officer for the wealth management division of Northern Trust in Chicago.
On Thursday, China \u2019s government said it would promptly carry out the tariff cease-fire with Washington. It also expressed confidence that the two nations can reach a trade agreement. The remarks suggest Beijing wants to avoid disruptions from Ms. Meng\u2019s arrest.
Even so, investors remained skeptical.
Meanwhile, OPEC wrapped up a meeting in Vienna without agreeing on a solution to falling oil prices. Some analysts said the oil market situation, coming on top of Mr. Trump\u2019s threats this week to impose higher tariffs on Chinese exports if a deal falls through, is creating more uncertainty for investors.
\u201cAfter President Trump\u2019s \u2018Tariff Man\u2019 tweet, markets were already questioning the progress on the tariff battle with China \u2014 or lack thereof \u2014 as evidenced by Tuesday\u2019s rout,\u201d Randy Frederick, vice president of trading and derivatives at Schwab Center for Financial Research, told The Washington Times. \u201cI think the arrest of the Huawei CFO in Canada has thrown more fuel on the fire.\u201d
Combined with Brexit worries and other factors, he said, \u201cyou have a recipe for more downside.\u201d
At one point during Thursday\u2019s trading session, all three of the major U. S. stock indexes were down more than 3 percent, putting each back in the red for the year.
Losses might have been pared by a Wall Street Journal report less than an hour before the closing bell that suggested the Federal Reserve could adopt a wait-and-see approach on future interest rate increases. That was relief to investors worried that the Fed might raise interest rates too fast, which could choke off economic growth.
\u201cThe Fed is trying to, in essence, come out and make it clear they are not on a rigid schedule of rate hikes next year,\u201d said Quincy Krosby, chief market strategist at Prudential Financial.
Still, the temporary erasing of most of the market\u2019s gains in 2018 comes after one of the best years on record. In 2017, the Dow rose 25 percent, the S&P 500 climbed 19 percent and the tech-heavy Nasdaq jumped 28 percent.
\u201cThe markets are in disarray while the economy remains in good shape,\u201d said Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania. \u201cTo the extent that the uncertain messages being sent about the status of trade negotiations with China are creating fear, there is every good reason to mark down values. That is especially true if you believe, as I do, that values were probably too high to begin with.\u201d
Aside from trade, concerns over bond yields and interest rates have pressured the stock market in recent days.
Traders continued to shovel money into bonds, a signal that they see weakness in the economy ahead. The yield on the 10-year Treasury note fell to 2.89 percent from 2.92 percent on Thursday, a big move, as traders scaled back expectations on the number of rate hikes the Fed would implement amid weakening economic data and market volatility.
\u201cThe market seems right now to be focused on increased risks for a 2020 recession,\u201d said Patrick Schaffer, global investment specialist at JPMorgan Private Bank. \u201cIt\u2019s a very hard market to buy when you see really strong signals that we are indeed late [in the economic] cycle.\u201d
\u2022 This article is based in part on wire-service reports.<\/p>\n