NEW YORK • Wall Street stocks fell sharply in volatile trading last Friday, with the Nasdaq confirming it is in a bear market, as concerns of slowing economic growth led US investors to flee stocks in high-valuation sectors such as technology and communications services.
The major US stocks indexes accelerated declines in the last hour of trading after White House trade adviser Peter Navarro said the United States and China might not reach a trade deal at the close of a 90-day negotiating window unless Beijing can agree to a profound overhaul of its economic policies.
With last Friday's losses, the Nasdaq has fallen nearly 22 per cent from its Aug 29 high. The tech-heavy index dropped to its lowest level since August last year.
The benchmark S&P 500 index, already on pace for its biggest percentage decline this month since the Great Depression, hit its lowest level since July last year. It is now down 17.5 per cent from its closing high on Sept 20.
The Dow Industrials fell to its lowest level since October last year and has declined 16.3 per cent from its Oct 3 closing high.
The mid-cap S&P 400 also confirmed it is in a bear market.
Mr Navarro's comments added to already-mounting concerns over political uncertainty and the possibility of a slowdown in economic growth. "That's definitely a weight on the market," said Ms Shannon Saccocia, chief investment officer at Boston Private, of Mr Navarro's comments. "For investors, there's a heck of a lot of small storms to be sailing ships through."
The increasing likelihood of a partial government shutdown injected further pessimism into US stock markets. President Donald Trump said there was a very good chance a government funding Bill, which includes funding for a wall along the Mexico border, would not pass the Senate.
The shutdown threat, along with Mr Navarro's comments, overshadowed remarks from New York Federal Reserve Bank president John Williams that the Fed was open to reassessing its views, which provided a fleeting boost to the markets.
Technology and communications services stocks bore the brunt of the sell-off, falling 3 per cent and 3.1 per cent, respectively.