US stocks fell on Thursday, erasing this year's gains on the S & P 500 and the Dow Jones Industrial Average, when the arrest of a Huawei executive raised fears of an increase in Sino-US tensions, while weak increased pressure.
The arrest of chief financial officer of Chinese smartphone maker Huawei Technologies Co Ltd in Canada on extradition to the United States has cast new doubts on Washington's and Beijing's closure of an agreement in its 90-day truce.
Markets enjoyed a mini-rally last week until Monday after the Federal Reserve signaled that the pace of interest rate hikes could slow and that China-US. truce at the weekend.
But trade-resolution optimism weakened on Tuesday and, coupled with a drop in earlier US Treasury yields, reignited concerns of slowing economic growth and causing Wall Street to fall.
The benchmark Treasury 10-year yield remained down from three months on Thursday and increased market pressure, coupled with a drop in oil prices after OPEC signaled it could agree to a cut lower than expected in oil production.
"Overall, we all have the same questions we asked on Tuesday," said Art Hogan, chief market strategist at B. Riley FBR in New York. "The news about Huawei throws another level of uncertainty about our ability to reach an agreement with China."
The data showed that the US trade deficit jumped to a 10-year high in October, suggesting that the Trump government's tariff measures to reduce the trade deficit were ineffective.
All 11 major S & P sectors were smaller, led by the 1.93% decline in the technology sector.
Concerns with Huawei, one of the largest chip buyers, according to research firm Bernstein, have dropped the Philadelphia Semiconductor index 2.30 percent.
The trade-sensitive industrial sector fell 1.88%. Energy stocks fell 2.92%, while declines in the bond market pushed financial stocks 2.51% lower.
At 11:30, the Dow fell 726.20 points, the S & P 500 fell 71.55 points and the Nasdaq Composite fell 154.85
TSX Canada dropped 395.16 points.
The CBOE Volatility Index, known as Wall Street's "fear meter," has risen to its highest level since Oct. 30.
Apple fell 3.1 percent and was the biggest stumbling block to S & P and Nasdaq, while the 1.9 percent decline in Boeing Co, the leader in trade, weighed more on Dow.
Declining issues outpaced the advancists for a rate of 6.84 to 1 on the NYSE and a rate of 3.85 to 1 on the Nasdaq.
The S & P index posted two new 52-week highs and 63 new lows, while the Nasdaq registered four new highs and 261 new lows.
© Thomson Reuters 2018