S&P 500 plunges in worst loss of year

Associated Press

NEW YORK

U.S. stocks plunged to their worst loss of the year Monday and investors around the world scrambled to sell on worries about how much President Donald Trump’s worsening trade war will damage the global economy.

China let its currency, the yuan, drop to its lowest level against the dollar in more than a decade, a move that Trump railed against as “currency manipulation.” It also halted purchases of U.S. farm products.

The moves follow Trump’s tweets from last week that threatened tariffs on about $300 billion of Chinese goods, which would extend tariffs across almost all Chinese imports.

The escalating dispute between the world’s largest economies is rattling investors unnerved about a global economy that was already slowing and falling U.S. corporate profits.

The S&P 500 dropped 87.31 points, or 3 percent, to 2,844.74 for its worst loss since December, when the market was wrapped in the throes of recession fears. It was down as much as 3.7 percent in the afternoon.

The Dow Jones Industrial Average lost 767.27, or 2.9 percent, to 25,717.74, and the Nasdaq composite fell 278.03, or 3.5 percent, to 7,726.04.

“A 3 percent drop in a day is very significant, and you’re seeing sizeable moves in every major foreign market,” said Rich Weiss, chief investment officer of multi-asset strategies at American Century Investments.

The sell-off began Monday in Asia, where indexes lost more than 1 percent, and intensified as it swept westward through Europe to the Americas. Investors in search of safety herded into U.S. government bonds, which sent yields plunging.