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- Stocks were hit hard Tuesday amid fears of a slowing global economy.
- The Financial Times reported the US called off trade talks with China, but Larry Kudlow, President Trump’s top economic adviser, said that report wasn’t true.
- On Monday, China posted its slowest economic growth in a decade and South Korea saw a big drop in exports.
- Also on Monday, the International Monetary Fund downgraded its global growth outlook.
- Watch US equity markets trade live.
US equity markets were under pressure Tuesday as worries of a slowing global economy persisted.
The Dow Jones Industrial Average was down 300 points, or 1.2%, while the S&P 500 and the Nasdaq Composite were lower by 1.4% and 1.9% respectively.
US markets had been closed Monday in observance of Martin Luther King Jr. Day, but investors returned to work only to see China announce that its economy had grown at its slowest pace in at least a decade and South Korea announce that its exports this month plunged compared with the same period last year.
A report out Monday from China’s National Bureau of Statistics indicated that the Chinese economy grew at a 6.4% year-over-year clip in the fourth quarter, its weakest since the first quarter of 2009. Investor worries were compounded by word that South Korean exports, seen as the world’s “economic canary in the coal mine,” cratered by 14.6% during the first 20 days of the year. Last year, they rose 1%.
Also on Monday, the International Monetary Fund cut its global growth forecast because of the trade war between the US and China. In its report, the IMF said it had come to expect global growth of 3.5% this year and 3.6% in 2020, down from its previous forecasts of 3.7% and 3.8%.
Stocks made session lows Monday afternoon following a report from the Financial Times that said the US rejected a fresh round of trade talks with China due to the lack of progress on two key issues. According to the report, China refused to budge on “forced” technology transfers and “structural” reforms to its economy.
However, Larry Kudlow, President Trump’s top economic adviser, shot down the report. “There was never a planned meeting that was canceled,” he said on CNBC.
Looking at things on a company-specific level, Arconic shares cratered as much as 25% after the company’s board of directors said it would no longer pursue a sale. Shares recouped a portion of their earlier losses but were still down 16%.
Netflix slid 4.3% despite getting its first Academy Award nomination for best picture.
And eBay surged more than 6% after the billionaire hedge fund manager Paul Singer’s Elliot Management announced a $1.4 billion stake and laid out its five-step plan for creating value. Elliott says shares could be worth $55 to $63 apiece, representing an upside of more than 75% to 100% from Tuesday’s price.
On the commodities front, West Texas Intermediate crude oil plunged more than 3% to below $52 a barrel at session lows.
The US 10-year yield was down 3.7 basis points at 2.75%.