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: 319704

Reported Deaths: 7369
CountyCasesDeaths
DeSoto22276267
Hinds20677421
Harrison18407317
Rankin13880282
Jackson13689248
Madison10249224
Lee10056176
Jones8464167
Forrest7827153
Lauderdale7260242
Lowndes6509150
Lamar634888
Lafayette6310121
Washington5420137
Bolivar4837133
Panola4669110
Oktibbeha466098
Pearl River4604147
Marshall4573105
Warren4440121
Pontotoc425373
Union415777
Monroe4155135
Neshoba4061179
Lincoln4008112
Hancock386687
Leflore3515125
Tate342486
Sunflower339491
Pike3369111
Alcorn325972
Scott320174
Yazoo314171
Adams307486
Itawamba305178
Copiah299966
Coahoma298784
Simpson298189
Tippah291968
Prentiss283861
Leake271974
Marion271280
Covington267283
Wayne264442
Grenada264087
George252051
Newton248663
Tishomingo231568
Winston229981
Jasper222148
Attala215073
Chickasaw210559
Holmes190374
Clay187854
Stone187833
Tallahatchie180041
Clarke178980
Calhoun174132
Yalobusha167840
Smith164034
Walthall135347
Greene131833
Lawrence131024
Montgomery128643
Noxubee128034
Perry127138
Amite126342
Carroll122330
Webster115032
Jefferson Davis108033
Tunica108027
Claiborne103130
Benton102325
Humphreys97533
Kemper96629
Franklin85023
Quitman82216
Choctaw79118
Wilkinson69532
Jefferson66228
Sharkey50917
Issaquena1696
Unassigned00

Alabama Coronavirus Cases

Cases: 548323

Reported Deaths: 11288
CountyCasesDeaths
Jefferson809531565
Mobile42066826
Madison35663525
Tuscaloosa26162458
Shelby25595254
Montgomery25081612
Baldwin21839313
Lee16265176
Calhoun14718325
Morgan14626285
Etowah14171363
Marshall12449230
Houston10764288
Elmore10295213
Limestone10182157
St. Clair10160251
Cullman9941201
Lauderdale9596249
DeKalb8967189
Talladega8458184
Walker7335280
Autauga7230113
Blount6944139
Jackson6922113
Colbert6414140
Coffee5627127
Dale4929114
Russell454941
Chilton4472116
Franklin431083
Covington4273122
Tallapoosa4136155
Escambia401780
Chambers3726124
Dallas3607156
Clarke352961
Marion3242106
Pike314078
Lawrence3129100
Winston283572
Bibb268464
Geneva257581
Marengo250665
Pickens236862
Barbour234659
Hale226878
Butler224071
Fayette218162
Henry193843
Cherokee187245
Randolph187044
Monroe179341
Washington170439
Macon162951
Clay160159
Crenshaw155657
Cleburne153244
Lamar146537
Lowndes142054
Wilcox127030
Bullock124242
Conecuh113430
Coosa111429
Perry108626
Sumter105732
Greene93534
Choctaw62025
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