The U.S. pulled the trigger on higher tariffs on USD 200 billion worth of Chinese goods even as both sides continued to negotiate.
New York: An escalating trade war between the U.S. and China pushed stocks lower for a fifth straight day today on Wall Street and put the market on track for its worst week of the year.
The U.S. pulled the trigger on higher tariffs on USD 200 billion worth of Chinese goods even as both sides continued to negotiate. President Donald Trump said in a tweet Friday morning that "there is absolutely no need to rush" on making a deal.
Technology and industrial stocks had some of the biggest declines as investors fled to lower-risk holdings liked utilities and real estate stocks. Several companies with substantial revenue in China fell. Apple and Micron fell 3pc. Boeing shed 1.2pc and Caterpillar fell 2pc.
The higher tariffs from the U.S. and China's response that it would take "necessary countermeasures" rattled investors who had been hoping for a quick resolution to the dispute.
Confidence in that outcome had eased investors' concerns this year, along with a more patient Federal Reserve and solid economic data. It all added up to help push stocks to their hottest start to a year in decades.
The sharp decline this week also ramped up the volume on what has been a mostly muted year with no major market-moving news. Investors have been cautiously watching corporate earnings, but have been mostly surprised by solid results.
The trade war has already stressed consumers and companies with higher costs on goods.
The latest tariff increase extends 25pc duties to a total of USD250 billion of Chinese imports. Trump has also signalled that he might expand penalties to all Chinese goods shipped to the U.S.
The S&P 500 index fell 1.3 per cent as of 11:12 a.m. The broad index is on track for its worst week of the year and has given back all of its gains from April. It's still up 13pc for the year.
The Dow Jones Industrial Average fell 1.1pc, or 294 points, to 25,533. The technology heavy Nasdaq fell 1.6pc.
The market's gains this year had been slow but steady up until this week. Prior to this week, the S&P 500 only had four losing weeks this year, most of them minor. Other than that it's been mostly up. The benchmark index clocked five weeks of gains of 2pc or more so far in 2019, and eight smaller weekly gains.
The slump this week has been especially hard on technology stocks, which have far outpaced the rest of the market this year. Those companies do a lot of business in China and would stand to lose greatly if the trade war drags on.
The Nasdaq index, which is heavily weighted with technology stocks, is on track to lose 4.8pc for the week after an even stronger run this year than the S&P 500. The weekly drop would be only its third this year and the biggest since late December. The Nasdaq is still up 17.2pc.
Symantec plunged 15.5pc after the CEO of the security software company resigned abruptly.
Greg Clark has been CEO since 2016. He will be immediately replaced on an interim basis by Richard S. Hill, a current member of the board and a former CEO of Novellus Systems.
The company gave no explanation for the abrupt change in leadership. It also reported weak revenue for the first quarter and gave investors a weak profit forecast for the current quarter.
Zillow rose 7.7pc after the real estate website operator reported a surge in first quarter revenue that narrowed its losses.
The revenue boost came mainly from the company's push into home purchases and sales.
The results beat Wall Street forecasts.
The casino operator fell 6.6pc after its revenue fell short of Wall Street forecasts. Wynn reported a decline in revenue from its key properties in the Chinese gambling haven of Macau.