Stock market news: Dow drops nearly 600 points, trade fears ratchet up

Dudley
Devine, right, works with fellow traders on the floor of the New
York Stock Exchange, Wednesday, Nov. 14, 2018.
AP Photo/Richard Drew

Wall Street fell sharply Tuesday
after optimism for easing trade tensions between Washington and
Beijing faded and as Treasury yields turned lower, stirring
concerns about the prospect of slowing economic growth around the
world.

The Dow Jones Industrial Average
dropped 2.1%, or nearly 600 points. The Nasdaq Composite shed
2.4%, and the S&P 500 was down 2%. The three US indices had
all rallied more than 1% Monday as President Donald Trump touted
his meeting with Chinese President Xi Jinping over the weekend in
Argentina.

But optimism faded after key
details on the framework of a deal appeared unsettled. Not
helping the mood, Trump named US Trade Representative Robert
Lighthizer

to lead negotiations with
China

. With Lighthizer
seen as a hardliner on China, the pick cast doubt on the
likelihood of a quick agreement.

“While this outcome is preferable
to many alternatives, investors should be clear that agreeing to
negotiate is no guarantee of resolution,” said Ron Temple,
managing director and head of US Equities at Lazard Asset
Management. “Details are scant and the two sides have offered
different statements of what was agreed.”

Treasury yields continued to
slide, with the 10-year down 4.8 basis points to 2.922%. Spreads
between long- and short-term bonds inverted for the first time
since the financial crisis, marking a move seen as a
potential recession signal.

“The inversion of parts of the
yield curve is further evidence that investors are coming round
to our downbeat view of the prospects for the US economy, and
points to further weakness in the S&P 500,” said John
Higgins, an analyst at Capital Economics.

The


dollar

stumbled 0.7%
against the Japanese yen, a closely-watched exchange rate during
times of financial stress.

Oil prices were mixed ahead of a
meeting Thursday and Friday among OPEC and other major producers
led by Russia, who are expected to make a deal to cut coordinated
output levels.

West Texas
Intermediate

fell to
trade just below $53 per barrel, while Brent rose 0.5% to nearly
$62.