Markets Right Now: Stocks turn jittery again, Dow sinks 500

Markets Right Now: Stocks turn jittery again, Dow sinks 500

"All this macro-economic uncertainty is clouding the 2019 earnings outlook, leading to increasingly violent equity swings as investors try to handicap what 2019 will look like", Alec Young, managing director of Global Markets Research, FTSE Russell, told ABC News.

Wall Street closed weaker yesterday.

At 2 p.m, ET, The S&P 500 index slid 73 points, or 2.7 per cent, to 2,717. Tokyo's Nikkei 225 lost 0.4 percent to 21,946.94 while Sydney's S&P-ASX 200 retreated 1.2 percent to 5,641.50.

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The Dow dropped 799 points, or 3.1 percent, to 25,027.

At 1:16 pm ET the Dow Jones Industrial Average was down 565.16 points, or 2.19%, at 25,261.27, the S&P 500 was down 62.55 points, or 2.24%, at 2,727.82 and the Nasdaq Composite was down 196.65 points, or 2.64%, at 7,244.86. The yield on the 10-year Treasury note fell to 2.91 percent from 2.99 percent late Monday, a large move.

US President Donald Trump appeared to be back in fighting mode after the weekend show of comity, saying he would "happily" sign a "fair" deal with China but was also ready to take a harder line. -China trade cease-fire. That revived fears their tariff battle could chill global economic growth.

"I am a Tariff Man", Trump said on Twitter.

"Maybe we're not going to get as dovish a Fed as some think", said Joseph LaVorgna, chief economist, Americas at Natixis in NY.

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The comments came after those from Fed chair Jerome Powell last week, which lifted stocks as they were interpreted as suggesting a less aggressive path of rate hikes.

The jitters helped drive demand for government bonds Tuesday, pushing prices higher.

A note from S&P Global Ratings predicted that United States 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 United States was nearing the "latter" stages of a multi-year growth cycle.

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. -China trade fight. CBS News business analyst Jill Schlesinger reports. "Questions on trade, worries about USA growth and perceived dovishness on the Fed all play a part in explaining these market moves. Concerns were also compounded by increasing news narrative on inverted curves and risks of a recession".

The KBW Bank index slid 4.90% with Bank of America Corp and Citigroup Inc dropping more than 5 % each. The contract rose 30 cents on Tuesday to close at $53.25.

Big losses for Boeing and Caterpillar, major exporters which would stand to lose much if trade tensions persist, weighed on the Dow.

The energy sector dropped 1.3 per cent as USA crude prices pared gains.

CURRENCIES: The dollar weakened to 112.91 yen from 113.69 yen late Monday.

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