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Stocks fell sharply on Thursday amid media reports that a meeting between President Donald Trump and Chinese President Xi Jinping is unlikely before a key March deadline.
The Dow Jones Industrial Average headed lower 378.71 points, or 1.5%, to 25,011.59
The S&P 500 lost 41.9 points, or 1.5%, to 2,689.71,
The NASDAQ Composite let go of 132.77 points, or 1.8%, to 7,242.51.
Reports circulated that a meeting between the two leaders was "highly unlikely." China and the U.S. have until the start of March to strike a trade deal. Otherwise, additional tariffs on Chinese goods take effect. The source said a meeting between Xi and Trump could happen shortly after the deadline passes, but noted both sides have too much work ahead of them.
Shares of Caterpillar doffed 2%, and Deere fell 1.8%. Boeing also dropped about 1%. These companies' stocks are seen as bellwethers for global trade given their exposure to overseas markets.
The market was already on edge as worries about the global economy were rekindled. The European Commission slashed its growth outlook for the euro zone this year as it expects the bloc's largest economies to be held back by global trade tensions, among other issues. The Commission said euro zone growth will slow to 1.3% this year from 1.9% in 2018, before rebounding in 2020 to 1.6%.
That growth outlook sparked worries that the global economy could be slowing down. Similar fears contributed to the market's sharp downturn in December. That decline briefly sent the S&P 500 into bear-market territory on an intraday basis.
The Bank of England also cut its 2019 outlook and sees the U.K. economy growing at its slowest pace since 2009.
Companies are reporting solid earnings growth for the fourth quarter with profits showing an increase of 14.1% on a year-over-year basis.
However, the outlooks accompanying those earnings reports are not as rosy. Because of those poor forecasts, earnings for the first quarter of 2019 are expected to drop more than 1%. That's the first year-over-year decline in earnings in more than two years.
Shares of BB&T gained 2.7%, and SunTrust Banks flew 8.6%, bucking the overall negative trend. The two stocks rose after BB&T agreed to buy SunTrust for more than $28 billion. The deal — the biggest in a decade within the banking sector — creates a $66-billion company and the sixth-largest U.S. bank by assets.
Prices for the benchmark 10-year U.S. Treasury gained ground, lowering yields to 2.66% from Wednesday’s 2.7%. Treasury prices and yields move in opposite directions.
Oil prices skidded $1.92 to $52.09 U.S. a barrel.
Gold prices dropped 40 cents to $1,314.00 U.S. an ounce.
