Dow Slides Fourth Day as US-China Trade War Worries Hit Equities

Markets in the US sank on Friday, with the Dow Jones Industrial Average sliding for a fourth straight day as trade war worries hit investors after the US slapped China with tariffs on $50 billion in goods, and the Asian nation outlined plans for retaliatory measures.

The S&P 500 and Nasdaq were also negative for the day but a late bounce fueled by program trading on quadruple witching lifted both into the plus column for a fourth consecutive week. The S&P was fractionally higher, while the Nasdaq closed the week with a sizable gain of 1.3% and the Dow was down 0.8% over the five days.

A drop in crude oil futures weighed on energy names, with the sector ending 2.1% down on the S&P. Chevron (CVX) and Exxon Mobil (XOM) were down 2% and 1.5% respectively on the Dow as speculation grows that top producers may announce plans to increase output at next week’s OPEC meeting in Vienna.

But the biggest declines on the Dow came in Caterpillar (CAT), a stock that’s wobbled amid uncertainty about US trade measures this year and fell 2% on Friday. Boeing (BA), another trade-sensitive stock, was down 1.3%.

As President Trump announced plans to levy the tariffs, the Asian nation responded by saying it will take measures “of the same scale and intensity,” according to state-owned Xinhua, citing the country’s Commerce ministry.

With Wall Street dogged by recent trade developments, economic data was largely pushed to the sidelines with the exception of industrial production and capacity utilization, both of which contracted from April. On the plus side, manufacturing activity in the NY Fed region accelerated while consumer sentiment improved as rising wages offset inflationary pressures.

In company news, Avalara (AVLR) surged 87% as the provider of cloud-based tax compliance automation made its trading debut. Neuralstem (CUR) sank 16% after the company said it’s searching for a successor to CEO Richard Daly, who intends to resign. Papa John’s (PZZA) fell 1.7% after Stifel cut its price target on the stock to $50 from $57 while keeping its hold rating.

By the close, the Dow was down 0.3%, the S&P 500 slipped 0.1% and the Nasdaq fell 0.2%.