Dow tumbles nearly 500 points as global growth concerns hammer stocks

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China’s economy falters as US stocks slide

Horizon Investments chief global strategist Greg Valliere and Surevest CEO Rob Luna discuss the problems with China’s economy and the recent market selloff.

U.S. stocks plunged Friday, as the Nasdaq Composite joined the Dow Jones Industrial Average and the S&P 500, now in negative territory for the week.

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All three of the major stock averages lost about 2 percent with the Dow Jones Industrial Average falling nearly 500 points. The Dow and S&P 500 are now negative for the year and in correction territory.

TickerSecurityLastChange%Chg
I:DJIDOW JONES AVERAGES24404.48-301.87-1.22%
SP500S&P 5002632.9-37.81-1.42%
I:COMPNASDAQ COMPOSITE INDEX7020.3562-136.87-1.91%

Healthcare stocks paced the declines on Friday as the worst sector in the S&P led by shares Johnson & Johnson following a Reuters report that said the company knew for decades about the presence of cancer-causing asbestos in its ubiquitous and iconic baby powder. In a statement the company called the report false. Shares of Starbucks also fell after the coffee chain unveiled an aggressive expansion strategy in China that could be at risk from slowing consumer sales in the world's second-largest economy.

TickerSecurityLastChange%Chg
JNJJOHNSON & JOHNSON128.80-1.89-1.45%
SBUXSTARBUCKS CORPORATION65.39+0.69+1.07%

Additionally, investor sentiment was dragged down by more worries over the health of China's economy after the country's November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further. The weak reports heightened concerns about the impact a protracted trade battle between the U.S. and China will have.

TickerSecurityLastChange%Chg
UUPINVESCO DB US DOLLAR INDEX BULLISH FUND - USD ACC25.560.000.00%
GLDSPDR GOLD SHARES TRUST - EUR ACC121.45+0.43+0.36%

Amid the volatility with stocks, the U.S. dollar hit a fresh 18-month high. The greenback is getting stronger as the euro weakens, tumbling on soft euro-zone manufacturing data. The British pound is also down for a fourth week on Brexit fears. Looking ahead, next Wednesday’s widely-anticipated Fed rate hike (futures are pricing in an 80% probability for a quarter-point increase) is also bullish for the greenback. The latest dollar strength is a headwind for gold prices which also dipped.

In commodities, Crude oil prices settled around the $51 per barrel level.

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On Thursday, U.S. stocks swung between losses and gains with the Nasdaq Composite and S&P 500 ended the session lower, while the Dow Jones Industrial Average managed to hang onto gains. Investors shifted into safer sectors such as utilities and consumer staples, while rotating out of materials and consumer discretionary names, both more dependent on U.S. economic growth which some speculate may be slowing.

Speaking exclusively to FOX Business, Former Federal Reserve Chair Alan Greenspan, raised that very point earlier in the week. “We have monthly data which suggests that we are slowing down, we are not going negative, but we are definitely slowing down – the rate of growth as we go into 2019 probably at a 2 to 2.5 percent pace maximum" he said during an interview with Maria Bartiromo.