Dow Jones Industrial Average drops 553 points, 2018 gains vanish

All the stock market gains of 2018 disappeared Tuesday in a flurry of sell orders on Wall Street, where investors soured on tech stocks and fretted about the trade war with China.

The sell-off began with tech stocks including Apple, Amazon and Alphabet, the parent company of Google, but quickly spread to other sectors such as energy, retail and telecommunications.

The Dow Jones Industrial Average closed at 24,462, down 553 points or 2.2 percent. The S&P 500 fell 49 points or 1.8 percent, and the tech-heavy Nasdaq shed 117 points or 1.7 percent.

The Dow and the S&P 500 fell into the red for the year, with the Dow down 1 percent and the S&P 500 down 1.1 percent since Dec. 31.

Analysts began warning about the potential for a recession next year.

White House chief economist Larry Kudlow tried to squelch that talk.

“I’m reading some of the weirdest stuff, how a recession is around the corner — nonsense,” Mr. Kudlow told reporters at the White House. “My personal view, our administration’s view, recession is so far in the distance, I can’t see it.”

Investors fretted about overvalued tech stocks, rising interest rates, a slowdown in global growth and an ongoing trade fight between the U.S. and China.

Katie Nixon, the chief investment officer for Northern Trust Wealth Management, said investors are selling tech stocks because of signs that trade tensions between the U.S. and China are getting worse.

“A resolution doesn’t seem to be coming in the short term,” she said. “A lot of the companies that are front and center — Alphabet, Apple, IBM — could be significantly limited in the way they export their technology.”

Presidents Trump and Chinese President Xi Jinping are set to meet next week at the G20 summit in Argentina, but a breakthrough in the trade standoff is not expected.

Mr. Trump assured Americans the economy is going strong and his team is doing “very well” in negotiating with China.

“China wants to make a deal very badly,” he told reporters as he left the White House for Florida, where he will spend the Thanksgiving holiday.

China has been suffering from an economic slowdown that has been worsened by the trade feud with the U.S.

Despite the Christmas shopping season kicking off, retailers took a hit. Investors worried about rising costs eating away profits.

Target plunged 10.5 percent after reporting earnings that missed Wall Street’s estimates due to higher expenses.

Kohl’s dropped 9.2 percent after its full-year profit forecast fell below expectations, and shares of Ross Stores and TJ Maxx also fell on disappointing forecasts.

The frenzied selling followed big loses Monday, when the Dow shed nearly 400 points. It was the worst start of a Thanksgiving week since 2011 for the Dow and the S&P 500 and since 2000 for the Nasdaq, according to Dow Jones Market Data.

At Tuesday’s close, the two-day losses totaled 3.7 percent on the Dow, 3.4 percent on the S&P 500 and 4.7 percent on the Nasdaq.

The turmoil on Wall Street followed downturns around the world.

In Europe, Germany’s DAX index lost 1.6 percent and France’s CAC 40 shed 1.2 percent. London’s FTSE 100 retreated 0.8 percent.

Tokyo’s Nikkei 225 lost 1.1 percent and Hong Kong’s Hang Seng shed 2 percent while Seoul’s Kospi retreated 0.9 percent.

• This article is based in part on wire service reports.