Dow plunges more than 300 points

Ivan Schwartz
March 22, 2018

Stocks had initially rallied and pushed the Dow Jones Industrial Average up more than 200 points after the Fed raised benchmark US interest rates by 0.25 percentage point, as expected, at the conclusion of a two-day policy meeting and said growth in the USA economy continues to look strong.

Investors were also cautious ahead of a two-day monetary policy meeting at the U.S. Federal Reserve starting on Tuesday.

Volume on USA exchanges was 6.9 billion shares, compared to the 7.2 billion average over the last 20 trading days. In 2.24pm trading, the Standard & Poor's 500 Index advanced 0.1 percent.

Shares of Facebook extended Monday's slide, trading 4.9 percent weaker as of 2.13pm in NY.

USA stocks dropped on Monday, with the S&P and Nasdaq suffering their worst day in just over five weeks, as concerns over increased regulation for large tech companies was spearheaded by a plunge in Facebook shares.

In Europe, the Stoxx 600 Index rose 0.5 percent from the previous close. The yen, typically bought during times of stress, rose to the day's high versus the dollar around 106.26.

MSCI (Frankfurt: 3HM.F - news) 's all-country equity market index flatlined, and is now 6 percent off January's record highs, pressured by the trade war fears and the possibility that the Fed will tighten policy more than expected. MSCI's gauge of stocks across the globe.MIWD00000PUS shed 0.07 percent.

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"Some of the more salient questions investors have is, has the tone of the Fed, which this time past year was certainly more skewed towards being dovish, has it now extended to becoming more hawkish?" said Eric Freedman, chief investment officer for U.S. Bank Wealth Management in Minneapolis. Markets are pricing in three rate increases this year, but some worry policymakers might squeeze in a fourth, triggering a bond and equity selloff. Cambridge Analytica worked on Facebook ads with President Donald Trump's campaign in 2016.

At 12:29 p.m. ET, the S&P 500 was down 1.44 percent to 2,712.36, having spent the session below its 50-day moving average.

Aside from the Fed, the Trump administration is creating a stir with plans for up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, sources familiar with the matter told Reuters.

This week's meeting of finance ministers and central banks of the world's 20 biggest economies failed to diffuse tensions, with the G20 saying only that it "recognised" the need for more "dialogue and actions".

Fears of a trade war have also weighed on commodity prices, though tensions in the Middle East supported oil.

Concerns about rising U.S. Treasury bond issuance as the government faces a widening fiscal deficit after last year's U.S. tax cuts has seen yields rise this year.

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