US stocks fall further on trade war fears, Dow -2.1%

US stocks fall further on trade war fears, Dow -2.1%
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New York: Wall Street’s selloff accelerated Thursday morning, with major indices falling as much as two percent ahead of expected White House trade actions targeting China.

Near 1600 GMT, the Dow Jones Industrial Average was down more than 500 points, or 2.0 percent, to 24,177.89.

The broad-based S&P 500 dropped 1.8 percent to 2,710.69, while the tech-rich Nasdaq Composite Index tumbled 1.9 percent to 7,204.06.

President Donald Trump was expected to announce actions around midday Thursday in response to alleged Chinese theft of US intellectual property.

China has vowed to “defend its legitimate rights and interests,” raising fears of a trade war.

Analysts also pointed to other factors behind the big drop, including a pullback in 10-year US Treasury yields that sparked a selloff in financial shares.

News reports that Trump was shaking up his legal team in response to the special counsel’s probe on Russia’s influence on the US election also contributed to unease.

Multinationals that rely heavily on China were among the bigger losers. Boeing, Caterpillar and General Motors fell more than three percent.

Banking shares fell on a pullback in yields in the 10-year US Treasury bonds. The move implies interest rates won’t rise as fast as expected, crimping bank profits.

JPMorgan Chase lost 2.8 percent, Bank of America 3.6 percent and Citigroup 2.7 percent.

Large technology companies also retreated after analysts largely panned Facebook chief executive Mark Zuckerberg’s response to a data scandal involving data consultant Cambridge Analytica.

Facebook dropped 2.6 percent. Amazon, Microsoft and Google-parent Alphabet all fell two percent or more.