Dow drops 459 points as Amazon tumbles, trade war fears rise

Trade war fears and a presidential attack on Amazon rocked Wall Street.The Dow closed down 459 points on Monda...

Posted: Apr 11, 2018 7:40 PM
Updated: Apr 11, 2018 7:40 PM

Trade war fears and a presidential attack on Amazon rocked Wall Street.

The Dow closed down 459 points on Monday. The Nasdaq plunged almost 3% and dropped into the red for the year. Heavy selling in tech stocks left the Nasdaq just shy of correction territory, 10% below its all-time closing high.

At one point, the Dow was down as much as 758 points, a brutal first day of trading for the second quarter of 2018. Market analysts blamed the sell-off on concerns about trade tensions and President Trump's attacks on Amazon.

Amazon, one of the biggest drivers of the 2017 market rally, tumbled 5%, wiping out more than $36 billion of its market value.

Trump once again accused Amazon of taking advantage of the US Postal Service, and he suggested that Amazon does not pay its fair share of tax.

In fact, Amazon pays the same lower rate that the post office charges other bulk shippers, and it collects sales tax in every state that charges it. Amazon does not collect sales tax on purchases made from third-party vendors.

Related: Trump isn't as pro-business as he claims

"You've got the president of the United States attacking a single company over what he considers to be unfair practices," said Ian Winer, head of equities at Wedbush Securities.

Amazon wasn't the only tech stock in trouble. Tesla, Netflix and Cisco all dropped by at least 4%. Intel plunged 6% on a Bloomberg News report that Apple plans to switch to its own chips. Almost every stock in the Nasdaq 100 lost ground.

"When investors see market leaders suddenly stumble, they become more cautious about the entire group," said Kate Warne, investment strategist at Edward Jones.

The selling spread to Asia, where benchmark indexes in Tokyo, Hong Kong and Shanghai all fell around 1% on Tuesday morning.

Related: Trump vs. Amazon: Let's set the record straight

Wall Street is also fretting about rising trade tensions, especially with China. Beijing responded to Trump's steel and aluminum tariffs on Monday by following through on its threat to impose tariffs on $3 billion of US imports. The tariffs apply to 128 products, ranging from pork and meat to steel pipes.

Trump plans to place additional tariffs on about $50 billion worth of Chinese goods - and Beijing has promised to respond.

John Toohey, head of equities at USAA, blamed the sell-off on concerns about the China tariffs. "Global trade could slow down, global supply chains could be impacted, and CEOs could be more cautious on capital spending," Toohey said.

NAFTA worries are also on the rise after Trump took aim at the trade deal between the United States, Canada and Mexico. Trump on Sunday linked NAFTA to his efforts to build a wall along the border with Mexico.

"They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!" Trump tweeted.

"It's a cause for concern. That mixing of issues is contributing to uncertainty," said Kristina Hooper, chief global market strategist at Invesco.

Related: Trump's attacks on Amazon are working

No matter the cause, signs of fear abounded. The VIX volatility index jumped more than 15%. CNNMoney's Fear & Greed Index of market sentiment dropped further into "extreme fear." Crude oil plunged about 3%. Gold, which tends to do well when investors are worried, climbed more than 1%.

"None of it makes a lot of sense," said Michael Block, chief strategist at Rhino Trading Partners. "I don't know what we learned that was new. Chinese tariffs are not surprising."

After spiking last year, the stock market hit extreme turbulence during the first three months of the year as investors worried about tariffs, inflation and tech stocks. The Dow snapped its longest quarterly winning streak in 20 years.

Stocks may be volatile, but the backdrop looks bright. Global economic growth is expected to accelerate and corporate profits are likely to surge, thanks in part to Trump's corporate tax cuts.

"It's unlikely to be the end of the bull market," Warne said. "The underlying fundamentals remain positive."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 144544

Reported Deaths: 3729
CountyCasesDeaths
DeSoto956999
Hinds9541193
Harrison6825105
Jackson6068116
Rankin523796
Lee480294
Madison4602102
Forrest367185
Jones344687
Lauderdale3343142
Lafayette313347
Washington3088106
Lamar281849
Bolivar237883
Oktibbeha237760
Lowndes228362
Neshoba2171113
Panola211047
Marshall207247
Leflore200789
Pontotoc193227
Monroe189577
Sunflower189554
Lincoln183964
Warren172157
Tate163349
Union160125
Pike160058
Copiah158840
Yazoo150638
Scott149929
Coahoma147342
Itawamba145533
Alcorn143724
Simpson143553
Pearl River142967
Prentiss139526
Grenada136344
Adams135948
Leake131643
Holmes124461
George121623
Tippah120930
Covington117234
Winston115824
Wayne115722
Hancock114137
Marion110746
Attala106233
Tishomingo106042
Newton102829
Chickasaw102332
Tallahatchie94727
Clarke88253
Clay86726
Jasper81121
Walthall74328
Stone72314
Montgomery71925
Calhoun71213
Carroll70514
Lawrence69914
Noxubee69017
Smith68616
Yalobusha67926
Perry65225
Tunica59519
Greene58422
Claiborne57416
Jefferson Davis54117
Humphreys52518
Amite50814
Benton48217
Quitman4786
Webster41614
Kemper40815
Wilkinson38422
Jefferson34011
Franklin3185
Sharkey30617
Choctaw3057
Issaquena1114
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Alabama Coronavirus Cases

Cases: 234080

Reported Deaths: 3459
CountyCasesDeaths
Jefferson30620491
Mobile19306358
Tuscaloosa12501148
Madison12410146
Montgomery12040232
Shelby980576
Baldwin826984
Lee753964
Morgan618247
Calhoun5997113
Etowah590564
Marshall581953
Houston507038
DeKalb463535
Cullman412636
Limestone404544
St. Clair398455
Elmore393961
Lauderdale382953
Walker349096
Talladega335942
Colbert296341
Jackson291924
Blount276336
Autauga263439
Franklin244833
Coffee233415
Dale226654
Dallas220231
Russell21803
Chilton216937
Covington212533
Escambia194431
Tallapoosa169290
Chambers168048
Pike155514
Clarke155419
Marion134535
Winston123723
Lawrence122436
Geneva11748
Marengo116924
Barbour116110
Pickens115318
Bibb114217
Butler113741
Randolph99821
Cherokee98924
Hale91631
Washington90018
Clay89423
Fayette84416
Henry8426
Lowndes78729
Monroe76811
Cleburne74414
Crenshaw70330
Macon70020
Bullock69019
Conecuh66814
Perry6686
Lamar6267
Wilcox62418
Sumter55322
Choctaw41713
Greene40217
Coosa3074
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