Published: Sat, April 07, 2018
Money | By Hannah Jacobs

Stocks trim opening losses despite trade worries, jobs disappointment

Stocks trim opening losses despite trade worries, jobs disappointment

After investors fled equities in the morning due to proposed retaliatory tariffs from China, their concerns about a potential trade war eased by the afternoon after Trump's top economic adviser Larry Kudlow said the administration was in a "negotiation" with China rather than a trade war.

The Dow Jones Industrial Average advanced 239.33 points, or 1.0% to 24,503.77 after swinging 741 points in Wednesday's highly volatile session.

Stocks are falling again as trade tensions heat up between the US and China. While the U.K.'s FTSE 100 Index surged up by 2.4 percent, the French CAC 40 Index and the German DAX Index soared by 2.6 percent and 2.9 percent, respectively. But late Thursday, Trump ordered the U.S. Trade Representative to consider placing more tariffs on Chinese imports.

The market is still attractive, with a strong earnings season likely ahead, Morgan Stanley analyst Michael Wilson said in a recent research note. It fell 0.7 percent for the week.

The speed with which the trade spat between Washington and Beijing is ratcheting up - the Chinese government took less than 11 hours to respond with its own measures - led to a sharp sell-off in global stock markets and commodities. While annual growth in average hourly earnings rose to 2.7 percent, it stayed below the 3 percent that economists estimate is needed to lift inflation toward the Federal Reserve's 2-percent target.

The stock posting the largest daily percentage gain in the S&P 500 ahead of the close Thursday was Diamond Offshore Drilling, Inc.

The S&P 500, which many index funds track, lost 58.37 points, or 2.2 percent, to 2,604.47.

Shares of chemicals and mining companies, some of which have stumbled since the steel and aluminium tariffs were first unveiled, were also in demand. Shares of Boeing, the single largest US exporter to China, tumbled 4.6 percent.

Also, the March non-farm payrolls report showed the USA adding 103K jobs, missing headline expectations by a wide margin. This year's performance is 2.08% while this quarter's performance is -2.23%.

"As a sector, technology has the most to lose from a world in which global trade is restricted and of course, some of the subjects of the tariffs, will also be hit", said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

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