SEVERE WX : Dense Fog Advisory View Alerts

Wild comeback: Dow recovers from 785-point plunge

The evolving US-China trade war has launched the stock market on a wild roller coaster ride.News of t...

Posted: Dec 7, 2018 2:01 PM
Updated: Dec 7, 2018 2:01 PM

The evolving US-China trade war has launched the stock market on a wild roller coaster ride.

News of the arrest of Huawei CFO Meng Wanzhou in Canada sent the Dow plummeting as much as 785 points on Thursday before the index staged a huge comeback. The Dow closed the day down just 79 points.

Arrests

Banking, finance and investments

Business, economy and trade

Companies

Continents and regions

Crime, law enforcement and corrections

Criminal law

Financial markets and investing

Huawei Technologies Co Ltd

Law and legal system

Law enforcement

North America

Securities trading

Stock markets

The Americas

United States

Donald Trump

International trade

Political Figures - US

Trade and development

Asia

China

East Asia

Economic indicators

Economy and economic indicators

Stock indexes

Economic policy

Trade regulation and policy

Trade wars

The Nasdaq eked out a small gain, recovering from trade war fears that had knocked the index down as much as 2.4%. The S&P 500 similarly rebounded, ending the day down just 0.2%.

The back-and-forth action shows how uncertain investors have become about the status of the US-China trade war. The market was also boosted by a report in The Wall Street Journal indicating the Federal Reserve is considering slowing down the pace of rate hikes next year.

"It's an encouraging sign that we closed significantly off the lows on a day that could have been in the record books for downdrafts," said Art Hogan, chief market strategist at B. Riley FBR.

While investors may be relieved at hints of a more cautious Fed, Hogan said that trade fears remain a major obstacle for the market.

"I don't think we fixed any of the things we were worried about," he said.

Huawei arrest sparks selling

The arrest of Meng sent shudders through global markets early in the day. Hong Kong's Hang Seng plunged 2.5% overnight, while European stock markets declined sharply as well. Germany's DAX nearly closed in a bear market, down nearly 20% from its January closing high.

Companies like Apple (AAPL) and Boeing (BA) that have significant exposure to China fell sharply before rebounding. Other trade-related stocks like Broadcom (AVGO) and Harley-Davidson (HOG) were also under pressure.

The arrest of Meng -- the daughter of the founder of one of China's most important companies -- serves as a fresh reminder that the United States and China remain in a trade war, despite the ceasefire reached last weekend in Argentina. Tariffs already imposed remain in place and new ones loom if talks fail to result in a breakthrough or at least an extension within 90 days.

Trade war fears

Renewed trade jitters, along with worries about an economic slowdown, sent the Dow plummeting 799 points on Tuesday. That selloff wiped out a chunk of last week's rally, which was the S&P 500's biggest weekly gain in seven years. US markets were closed on Wednesday in honor of President George H.W. Bush.

"The Huawei arrest just adds to concerns that this trade situation could deteriorate further," said Kristina Hooper, global market strategist at Invesco.

Hooper said investors have become more concerned about the US-China trade standoff because the negative impacts have become more apparent. Supply chains have been disrupted, raw material costs are on the rise and businesses may be delaying investment decisions.

"Almost none of us lived through the full-blown trade wars that erupted in the 1930s," Hooper said.

President Donald Trump spooked investors on Tuesday when he called himself a "Tariff Man" in a tweet. Trump also suggested tariffs will "MAKE AMERICA RICH AGAIN" -- even though these levies are paid by American companies and consumers.

Oil plunges again

Energy stocks retreated in tandem with plunging oil prices. Pioneer Natural Resources (PXD) and Baker Hughes (BHGE) slumped more than 3%. US oil prices tumbled 2.7% after OPEC and its allies concluded Thursday's meeting in Vienna without holding a press conference. Analysts had been anticipating a significant supply cut that would balance the market.

Saudi Arabia, the leader of OPEC, hinted that the reduction could be less than what analysts anticipated. Khalid Al Falih, the kingdom's energy minister, told reporters that a cut of 1.3 million barrels per day is "excessive."

Investors are also nervously watching a recession indicator in the bond market: the slope of the yield curve. The gap between the two-year and 10-year Treasury yield shrank this week to levels unseen since just before the Great Recession. An inversion -- where short-term rates are higher than long-term ones -- has been a reliable prognosticator of recessions in the past.

Concerns about the flattening yield curve weighed heavily on bank stocks. Bank of America (BAC), Citigroup (C) and Morgan Stanley (MS) all closed down on the day.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 1118335

Reported Deaths: 17712
CountyCasesDeaths
Marion1455892240
Lake724831254
Allen67063882
Hamilton51060487
St. Joseph49820649
Elkhart40268546
Vanderburgh34714497
Tippecanoe30808276
Johnson27696467
Hendricks26313385
Porter25657386
Madison21131455
Clark20238279
Vigo19059309
LaPorte17192261
Howard16770314
Delaware16761303
Monroe16628220
Kosciusko14293167
Hancock13113186
Bartholomew12983190
Warrick12210190
Wayne12090269
Floyd12011226
Grant11998245
Morgan10409192
Boone9869124
Noble9316122
Henry9177169
Marshall9152147
Dearborn8970100
Dubois8835140
Shelby8281130
Cass8167128
Lawrence8057185
DeKalb7817109
Jackson770793
Huntington7661115
Gibson7102118
Montgomery7101123
Harrison6954100
Knox6915116
Steuben669089
Whitley659660
Miami6595113
Putnam645085
Clinton627179
Wabash6221111
Jasper613192
Jefferson5856105
Ripley557294
Adams542281
Daviess5076117
Scott491580
Wells4836105
White478469
Greene4701101
Clay464662
Decatur4611110
Fayette452496
Jennings452067
LaGrange427491
Posey410044
Randolph3944107
Washington390956
Fountain375964
Fulton364874
Spencer362247
Starke355574
Owen353577
Sullivan348555
Orange331372
Jay331050
Rush309533
Carroll296239
Franklin292744
Perry290553
Vermillion283658
Tipton251167
Parke250130
Pike248644
Blackford222144
Pulaski210359
Newton182452
Brown177550
Crawford169129
Benton168417
Martin152120
Switzerland147612
Warren135816
Union122616
Ohio92413
Unassigned0595

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1717876

Reported Deaths: 26851
CountyCasesDeaths
Franklin1793291843
Cuyahoga1681592655
Hamilton1137721544
Montgomery805721405
Summit719531210
Lucas630291027
Butler56852814
Stark538501183
Lorain42330645
Warren35959417
Mahoning35798788
Lake32314501
Clermont31289369
Trumbull27344620
Delaware27206185
Licking26658344
Medina26042353
Fairfield24638287
Greene24378373
Clark22122390
Portage21257283
Richland21102342
Wood20128248
Allen18969326
Miami17338352
Columbiana16905335
Muskingum16726207
Wayne15740307
Tuscarawas14454362
Marion13332196
Ashtabula12732237
Erie12685199
Scioto12475188
Pickaway12260155
Ross11719226
Hancock11529175
Geauga10934179
Lawrence10653172
Belmont10459234
Huron9805159
Jefferson9632228
Union957375
Sandusky9348166
Seneca8917161
Knox8792176
Washington8688159
Darke8399181
Athens838197
Ashland8029152
Auglaize7943120
Shelby7511135
Defiance7358117
Crawford7281150
Fulton7215113
Brown7173116
Logan7003111
Guernsey696186
Mercer6933100
Highland6745120
Clinton6526106
Williams650099
Madison649790
Preble6274140
Putnam6244122
Jackson581597
Champaign580887
Perry566779
Coshocton5645108
Ottawa5641102
Morrow517765
Fayette494072
Hardin4895100
Gallia471478
Van Wert467895
Pike465578
Adams4592110
Henry434280
Hocking410193
Holmes3999141
Wyandot377675
Carroll366178
Paulding325451
Meigs305961
Monroe235961
Noble220349
Morgan216939
Harrison213153
Vinton187638
Unassigned06
Fort Wayne
Cloudy
29° wxIcon
Hi: 46° Lo: 29°
Feels Like: 24°
Angola
Cloudy
27° wxIcon
Hi: 43° Lo: 29°
Feels Like: 27°
Huntington
Cloudy
29° wxIcon
Hi: 46° Lo: 29°
Feels Like: 29°
Decatur
Cloudy
29° wxIcon
Hi: 47° Lo: 31°
Feels Like: 24°
Van Wert
Cloudy
33° wxIcon
Hi: 46° Lo: 31°
Feels Like: 29°
Saturday is looking great, with warmer temperatures, wet and windy conditions returning Sunday.
WFFT Radar
WFFT Temperatures
WFFT National

Community Events