Dow Index Plunges, Stocks Tumble Ahead of Trump Announcement on China Tariffs
New York (Mar 22) Stocks fell sharply Thursday, March 22, as investors reacted to the Federal Reserve's decision to raise interest rates and braced for the fallout from $50 billion in tariffs targeted toward China as Donald Trump vowed to lower the U.S. trade deficit with the world's second-largest economy.
The Dow Jones Industrial Average fell 367 points, or 1.49%, to 24,314, the S&P 500 dropped 1.29% and the Nasdaq was tumbling 1.31%.
Leading the Dow lower were Caterpillar Inc. (CAT - Get Report) , 3M Co. (MMM - Get Report) and Boeing Co. (BA - Get Report) .
Trump is expected to announce the new tariffs, which will largely impact consumer technology goods, as part of his broader effort to both trim China's $375 billion trade surplus and punish the nation for alleged intellectual property violations. The memorandum, which the White House has said will be called "targeting China's economic aggression" is expected to be signed by Trump at 12:30 p.m. ET in Washington.
Stocks finished lower on Wednesday, March 21, after the Fed announced it would be raising interest rates for the sixth time since late 2015 in a bid to keep inflation from rising too fast as the economy accelerates.
The U.S. central bank's monetary-policy committee raised the benchmark rate by a quarter point to a range of 1.5% to 1.75%. The Fed had held the rate close to zero from 2008 through 2015 in a bid to revive the economy and markets following the financial crisis.
The Fed said Wednesday that the "economic outlook has strengthened in recent months," a new sentence the central bank hadn't included in previous reports. The Fed also raised its GDP forecasts for 2017 and 2018, leaving many Fed-watchers to believe the three rate hikes in 2018 forecast by the Fed may not be the minimum.
Action Alerts Plus holding Facebook Inc. (FB - Get Report) CEO Mark Zuckerberg said in a televised interview that he would be willing to testify before Congress and is open to regulation in light of the social media giant's data breach scandal.
Earlier on Wednesday, March 21, Zuckerberg, after drawing criticism from investors for his silence over the Cambridge Analytica data, said in a lengthy post that the social media giant has a "responsibility to protect your data, and if we can't then we don't deserve to serve you."
Zuckerberg's company came under fire this week following news that data analysis firm Cambridge Analytica harvested personal information from as many as 50 million Facebook users to influence elections in the U.S. and U.K.
Facebook shares slumped 1.7%, the third day of four this week the stock has declined.
Reckitt Benckiser Group PLC, the British consumer goods maker, said Thursday it terminated talks to buy the consumer healthcare business of Pfizer Inc. ( PFE - Get Report) just hours before it was expected to table a formal offer.
Pfizer shares declined 1%.
•Reckitt Benckiser Exits Talks to Buy Pfizer's Consumer Healthcare Division
Twitter Inc. (TWTR - Get Report) was down 3.4% following reports that its Chief Information Security Officer Michael Coates was leaving the company.
Shares of Conagra Brands Inc. ( CAG - Get Report) rose 1.8% on Thursday after the branded food company reported fiscal third-quarter profit that topped analysts' forecasts and it raised its outlook for fiscal 2018.
Darden Restaurants Inc. ( DRI - Get Report) posted third-quarter adjusted earnings of $1.71 a share, higher than estimates of $1.64, and raised its earnings outlook for fiscal 2018. Shares fell 7.6%.
Guess Inc. ( GES - Get Report) jumped 24% after the clothing retailer posted fourth-quarter earnings and sales that were better than analysts' expectations.
Accenture PLC ( ACN - Get Report) fell 6% despite reporting fiscal second-quarter earnings and sales that topped forecasts and issuing better full-year guidance.
Jobless claims in the U.S. last week rose 3,000 to 229,000.
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