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Trade Worries Lead To Continued Weakness On Wall Street - U.S. Commentary


After ending the previous session firmly in negative territory, stocks are seeing further downside in morning trading on Friday. The major averages are pulling back further off the two-month closing highs set on Tuesday.

In recent trading, the major averages have climbed off their lows of the session. The Dow is down 195.83 points or 0.8 percent at 24,973.70, the Nasdaq is down 42.21 points or 0.6 percent at 7,246.14 and the S&P 500 is down 15.69 points or 0.6 percent at 2,690.36.

The continued weakness on Wall Street comes amid lingering concerns about a potential trade deal between the U.S. and China.

Adding to the worries, a report from the Wall Street Journal said the U.S. and China don't even have a draft accord that specifies where they agree and disagree.

The report comes after President Donald Trump told reporters he will not meet with Chinese President Xi Jinping before a crucial March deadline.

"Not yet. Maybe. Probably too soon," Trump said when asked if he would meet with Xi in the next month or so before flatly saying, "No" when asked if the two leaders would meet before the deadline.

Tariffs on Chinese goods are currently set to jump automatically on the deadline, although Trump is expected to delay the increase as talks continue.

However, White House economic adviser Larry Kudlow told Fox Business on Thursday the U.S. and China have a "pretty sizable distance to go" before reaching a trade deal.

Overall trading activity may be somewhat subdued, as a lack of major U.S. economic data could keep some traders on the sidelines.

Energy stocks are leading the way lower once again, adding to the steep losses posted in the previous session. The continued weakness among energy stocks comes amid a modest decrease by the price of crude oil.

Steel, retail, and semiconductor stocks are also seeing considerable weakness, while significant strength has emerged among networking and tobacco stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index plummeted by 2 percent, while Hong Kong's Hang Seng Index slipped by 0.2 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has tumbled by 1.1 percent, the French CAC 40 Index is down by 0.7 percent and the U.K.'s FTSE 100 Index is down by 0.3 percent.

In the bond market, treasuries are extending the upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 2.634 percent.

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