NEW YORK -- Rising tensions between China and the United States pummeled stocks again Friday as investors worried that tariffs and harsh words will touch off a trade war that derails the global economy.
The Dow Jones industrial average dropped 572.46 points, or 2.3 percent, to 23,932.76. It's down 10 percent from its record high in late January.
The stock market changed direction again and again this week as investors tried to get a sense of whether the trade dispute between the world's two largest economies will escalate. On Friday, technology companies, banks, and industrial and health care stocks sank. The market didn't get any help from a March jobs report that was weaker than expected.
With officials of President Donald Trump's administration sounding conciliatory one day and hostile the next and the president quick to fire off yet another tweet, investors simply don't know what the U.S. wants to achieve in its talks with China, said Katie Nixon, chief investment officer for Northern Trust Wealth Management.
"The process itself seems to be quite chaotic," she said. "We're not quite sure what the long-term strategy is."
The administration spent the past few days reassuring investors that it's not rushing into a trade war, and China's government has done the same. But late Thursday, Trump ordered the U.S. trade representative to consider tariffs on another $100 billion in Chinese imports.
Investors found few bright spots in afternoon comments from Jerome Powell, the new chairman of the Federal Reserve. In a speech in Chicago, Powell gave little indication that he planned to deviate from the Fed's gradual path of lifting interest rates. He also suggested after his speech that he was unsure how the new tariffs imposed by the United States and China would affect the economy.
The Dow average, which contains numerous multinational companies, including industrial powerhouses Boeing and Caterpillar, swung dramatically this week, with almost 1,300 points separating its lowest point Monday afternoon from its high late Thursday. It fell 0.7 percent for the week.
Shares of Caterpillar, a construction-equipment-maker, slid $5.14, or 3.5 percent, to $142.99 on Friday, and shares of Boeing, an aerospace company, fell $10.28, or 3.1 percent, to $326.12. Among technology companies, Apple gave up $4.42, or 2.6 percent, to $168.378, and PayPal shed $3.09, or 4 percent, to $73.86.
Jason Pride, chief investment officer for Glenmede's private-client business, said Trump's latest order caught investors off guard.
"It shows a willingness to go to the mat on this and fight it out," he said. Still, Pride said all of the proposed tariffs add up to a pretty small fraction of trade between the U.S. and China, and overall, they wouldn't affect the nation's economy that much if they do go into effect.
Nixon, of Northern Trust, said businesses also support the idea of making changes in America's trade relationship with China. Even though investors are optimistic about the state of the global economy and company profits continue to grow, Nixon said, the administration is creating the thing investors hate the most: uncertainty.
"People have started to feel like this is a bit of the children's game. Somehow the markets haven't really gotten any actual sense of whether this will be true," said Vincent Chan, head of China equity research for Credit Suisse, the investment bank.
"Tariffs on $100 billion of Chinese products is a big thing, but the market thinks it's a bit of a childish move," he said. "The market doesn't know how to react."
On Friday, the Standard & Poor's 500, which many index funds track, fell 58.37 points, or 2.2 percent, to 2,604.47. The Nasdaq composite slid 161.44 points, or 2.3 percent, to 6,915.11. The Russell 2000 index of smaller-company stocks dipped 29.63 points, or 1.9 percent, to 1,513.30.
The trade tensions overshadowed the latest U.S. jobs report, which showed hiring cooled by more than forecast in March. The government reported that U.S. employers added 103,000 jobs last month, a weaker pace than previous months. The Labor Department also said fewer jobs were added in January and February than it initially estimated.
The unemployment rate remains low and the job market looks fundamentally healthy, but it's possible some employers are struggling to find workers.
The renewed saber rattling of international trade provided a bookend to a week that started with equities tumbling amid amplified rhetoric. That gave way to a three-day rally after White House officials signaled the president's tough talk was part of a negotiating plan.
"It's bad when this happens on a Friday, because then people get freaked out over the weekend," said Donald Selkin, New York-based chief market strategist at Newbridge Securities Corp. "The worst thing you want to see is a bad market late on a Friday."
The price of benchmark U.S. crude oil fell $1.48, or 2.3 percent, to $62.06 a barrel in New York while Brent crude, used to price international oils, fell $1.22, or 1.8 percent, to $67.11 per barrel in London. Oil prices fell almost 5 percent this week as investors wondered if an increase in trade tensions will reduce demand for oil by slowing down the global economy.
Bond prices rose, sending yields lower. The yield on the 10-year Treasury fell to 2.77 percent from 2.83 percent. The lower yields mean banks can't make as much money from lending, and that sent bank stocks lower.
Gold rose $7.60 to $1,336.10 an ounce. Silver edged up 1 cent to $16.36 an ounce. Copper fell 2 cents to $3.06 a pound.
Information for this article was contributed by Marley Jay of The Associated Press, by Matt Phillips and Alexandra Stevenson of The New York Times and by Jeremy Herron and Janine Wolf of Bloomberg News.
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