Dow falls +500 points as threat of trade war roils markets

By StocksFOXBusiness

Why investors should stay in the market

Payne Capital Management President Ryan Payne and Mark Rosenberg, public affairs professor at Columbia University, and Benchmark Investments managing partner Kevin Kelly on how the stock market reacts to news from Washington and why investors should stay in the market.

Wall Street stocks fell hard on Friday, with the Dow Jones Industrial Average closing down more than 500 points, as trade fears and a weak jobs report weighed on investor sentiment.

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The day’s losses were enough to put all three major U.S. stock indexes in negative territory for the week. The 30 Dow component stocks were lower at the close.

The Dow fell 572.46 points, or 2.3%, to 23,932.76. The S&P 500 Index lost 58.37, or 2.2%, to 2,604.47. The Nasdaq slid 161.44, or 2.3%, to 6,915.11.

Federal Reserve Chair Jerome Powell said during a question-and-answer session at the Economic Club of Chicago that the central bank didn't know how tariffs would affect the economic outlook.

The shares of Amazon sank as Treasury Secretary Steven Mnuchin criticized the e-commerce giant's tax treatment, echoing President Donald Trump.

"Amazon pays sales tax on their own account, but doesn't pay it on the third-party business," Mnuchin said. "We don't think that makes sense."

Shares of Boeing, which relies heavily on industrial goods that are subject to tariffs, fell more than 4%. Caterpillar, the construction machinery manufacturer, dropped more than 4.5%. Goldman Sachs and JPMorgan Chase posted declines owing to higher bond prices.

Losses started before the opening bell with fears about a U.S.-China trade war hitting sentiment.

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China’s commerce ministry on Friday said it would fight the U.S. at “any cost” after President Donald Trump threatened to impose tariffs on an additional $100 billion in Chinese imports.

Investors were also reacting to the latest payrolls report, which showed the U.S. economy added a lower-than-expected number of jobs in March.

Employers created 103,000 jobs last month, missing expectations for 193,000 jobs, while the jobless rate remained at 4.1% versus analysts’ expectations that it would fall to 4%.

"The job market is widely regarded to be close to full employment," Bankrate.com senior economic analyst Mark Hamrick said. "So hiring gains should be slowing at this point in the expansion."

Chinese equity markets remained closed for a holiday.

Oil prices fell after Trump’s threat, extending their drop after Baker Hughes released its weekly rig count, which showed the number of active rigs in the U.S. increased by 11 to 808.