Dow plunges nearly 800 points

Michael Milano

Michael Milano

However, no joint statement from the US and Chinese trade teams was issued after the leaders of the world's two largest economies met on Saturday on the sidelines of the G-20.

Eastern Time. The Dow Jones Industrial Average dropped 206 points, or 0.8 percent, to 25,619.

"You have the drop in bond yields and the implications on growth going forward", said Willie Delwiche, investment strategist at Baird.

The sharp drop in yields hurt banks because it makes it harder to earn money from lending.

REVVED UP: AutoZone climbed 4.2 percent to $859.11 after the auto parts retailer delivered third-quarter earnings that exceeded analysts' forecasts.

ASIA'S DAY: Hong Kong's Hang Seng index fell 1.6 percent to 26,819.58 and the Shanghai Composite Index declined 0.6 percent to 2,649.81. The Nasdaq fell 283 points, or 3.8 percent, to 7,158. The Dow Jones plunged nearly 800 points, while the S&P 500 was driven lower by financials, which shed nearly 4.4 per cent. The yield on the benchmark 10-year Treasury note fell to its lowest level in three months, signaling that the bond market is anxious about long-term economic growth.

American markets fell sharply last night amid fresh concerns about the strength of the U.S. economy and the future of President Trump's trade war with China.

The Dow fell by as much as 719 points, or 2.8 percent by mid-afternoon Tuesday, for a total drop of 800 points. In Japan, the Nikkei 225 index fell 0.4 percent to 21,946.94. The Nasdaq composite lost 48 points, or 0.7 percent, to 7,392. Copper fell 1.8 percent to $2.78 a pound.

Yields on two-year and three-year bonds held above the five-year yield for a second day, while the benchmark 10-year yield hit its lowest since mid-September as demand for longer-dated Treasuries rose on bets of an approaching economic slowdown.

A note from S&P Global Ratings predicted that USA growth would slow from 2.9 per cent in 2018 to 2.3 per cent in 2019 and 1.8 per cent in 2020, adding that the U.S. was nearing the "latter" stages of a multi-year growth cycle.

Stock and bond trading will be closed in the U.S. Wednesday in observance of a national day of mourning for former President George H.W. Bush.

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Bank of America fell 5.1 per cent.

The Dow lost 536 points, or 2.1 percent, to 25,292.

"People think there is not "substance" behind Trumps tweets about tariffs so the markets are giving back the gains from before the G20 meeting", Michael Matousek, head trader at U.S. Global Investors, told ABC News.

Losses in banks, technology stocks and industrial companies outweighed gains elsewhere Tuesday.

Apple lost 3.7 per cent to $177.99 after the consumer electronics giant was downgraded by HSBC analysts, citing the possibility that iPhone volume and value growth may moderate due to a saturated mobile phone market. The S&P ASX/200 in Australia gave up 1 percent. "Until confidence in the global economy improves and bond yields stabilize, market psychology is likely to remain fragile", Young added.

Wall Street stocks tumbled on Tuesday (Dec 4) on worries over slowing US growth and trade conflict amid mounting skepticism over the US-China tariff truce.

Apple lost 1.7 per cent early Tuesday and Bank of America was down 1.3 per cent.

Discount retail chain Dollar General slid 8.2 per cent to $102.54 after the company reported weak quarterly results.

The S&P 500 index lost 23 points, or 0.9 per cent, to 2,766. Toll's shares rose 0.4 per cent to $33.67, recovering from a morning sell-off.

Bond prices rose. The yield on the 10-year Treasury fell to 2.95 percent.

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