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Stock Market Plunges As China Trade War Worries Continue

The stock market sold off sharply Friday as three-session win streaks for the major stock indexes came to an abrupt end.

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Negative sentiment in the stock market was fueled after President Trump threatened another $100 billion of tariffs on China imports.

Investors weren’t overly fearful, though. The put-call ratio registered a tame reading of 1.04. Excessive fear has been seen at many market bottoms in the past.

At the close, the Dow Jones industrial average, S&P 500 and Nasdaq composite showed losses of around 2.2% to 2.3%. Small caps also took heat as the Russell 2000 gave back 2%. Preliminary data showed volume coming in higher than Thursday’s levels. Volume picked up late.

Department stores, steel producers and oil and gas producers were among the hardest hit groups with losses of 4% to 5%.

Dow Stocks Take Heat

The two stocks in the Dow most vulnerable to a trade war with China, Boeing (BA) and Caterpillar (CAT), lagged with losses of around 3%. Chipmaker Intel (INTC) also lost 3%.

JPMorgan (JPM) also lagged in the Dow. Shares dropped 2.5%. Financials fell in spades as money flowed into bonds again. The 10-year Treasury yield slumped 6 basis points to around 2.77%.

First-quarter earnings season kicks off next week. Results from JPMorgan and Citigroup (C) are due Friday before the open.

China Names Lead In Stock Market

Inside the IBD 50, China-based Baozun (BZUN) continued to show bullish action at the 10-week moving average. Shares rose more than 2.5%. It’s a volatile stock, though, prone to erratic price swings. Fundamentals are compelling, with full-year earnings seen rising 69% this year and 59% in 2019. Baozun is a provider of e-commerce solutions.

Leaderboard name Autohome (ATHM) also bucked the trend. Shares of the China-based name added 0.8%.

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