Dow Jones drops 450 points as Amazon tumbles and trade war fires rise
Technology company was the subject of another attack from Donald Trump, as China retaliates to president's trade tariffs
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Your support makes all the difference.Worries over protectionist trade policies between the US and China and controversy surrounding technology companies meant that the Dow Jones industrial average closed more than 400 points down.
There were steep drops in share price on Monday from former big winners including Netflix, Microsoft and Alphabet, Google's parent company.
Among other recent winners, Intel plummeted 6.1 per cent following a report in Bloomberg News that Apple plans to start using its own chips in Mac computers.
And Amazon sank following more broadsides from President Donald Trump via Twitter.
The Dow fell as much as 758 points, although major indexes regained some of their losses later in the afternoon.
The Dow lost 458.92 points, or 1.9 per cent, to 23,644.19. The S&P 500 index gave up 58.99 points, or 2.2 per cent, to 2,581.88.
The Nasdaq composite slumped 193.33 points, or 2.7 per cent, to 6,870.12. The Russell 2000 index of smaller-company stocks fell 36.90 points, or 2.4, to 1,492.53.
Kate Warne, an investment strategist for Edward Jones, said moves by China to hit back over trade tariffs imposed by the US were small but significant.
“The fact that a country has actually raised tariffs in retaliation is an important step in the wrong direction,” she said.
“The tariffs imposed by China today lead to greater worries that we will see escalating tariffs and the possibility of a much bigger impact than investors were anticipating last week.
“And that could be true for Mexico as well as for China.”
Food maker Tyson dropped 6.2 per cent after China raised import duties on a $3bn list of US goods in response to the tariffs on imported steel and aluminium that President Trump ordered last month.
Amazon fell another 5.2 per cent. The online retailer has slumped with the market recently, although it is still up about 17 per cent in 2018.
Mr Trump has repeatedly criticised Amazon over issues including taxes and the company's shipping deals with the US Postal Service.
Jack Ablin, chief investment officer of Cresset Wealth Advisors, said Amazon is just the latest company to falter after it drew scrutiny from the government, as Facebook and Alphabet have slumped recently over data privacy concerns.
“It seems like the long arm of the government is interfering with investors' expectations,” he said.
“Investors are pricing in an escalating trade war and regulation of tech companies.”
Microsoft dropped 3 per cent and Alphabet, Google's parent company, shed 2.4 per cent.
Monday marked the first time another country has placed tariffs on US goods in response to the Trump administration's recent trade sanctions.
The price of gold climbed 1.2 per cent to 1,343.60 dollars an ounce and silver jumped 2% to 16.60 dollars an ounce as some investors took money out of stocks and looked for safer investments.
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