US stocks tumbled again Thursday, knocking 600 points off the Dow Jones Industrial Average and putting the benchmark S&P 500 on track for its worst week since March.

Read more:
Who is Sabrina Meng Wanzhou and why is this such a big deal?
Auckland academic sees serious fallout as Huawei CFO arrested at US request

The broad market decline came as the arrest of a senior Chinese technology executive overshadowed some positive comments on trade from Beijing and threatened to worsen trade tensions between the US and China.

The lingering trade dispute has deepened investors' worries that the prospects for global economic and corporate earnings growth could be dimming.

Advertisement

Traders continued to shovel money into bonds, a signal that they see weakness in the economy ahead. The yield on the 10-year Treasury note fell to 2.85 per cent from 2.92 per cent on Tuesday, a large move.

US stocks and bonds trading was closed Wednesday because of a national day of mourning for President George HW Bush.

"The market seems right now to be focused on increased risks for a 2020 recession," said Patrick Schaffer, Global Investment Specialist, J.P. Morgan Private Bank. "It's a very hard market to buy when you see really strong signals that we are indeed late (in the economic) cycle."

Oil prices fell sharply as traders appeared to doubt that an expected production cut by OPEC will be enough to boost the price of crude.

Technology companies, banks and health care stocks took some of the heaviest losses in the latest wave of selling. Oracle slid 4.3 per cent to US$46.64. Citigroup fell 4.8 per cent to US$59.25. Centene sank 7.3 per cent to US$131.80.

The S&P 500 index slid 61 points, or 2.3 per cent, to 2,638 as of 11:47 a.m. Eastern Time. The Dow dropped 626 points, or 2.5 per cent, to 24,400. The average briefly slumped as much as 784 points. The technology-heavy Nasdaq composite lost 119 points, or 1.7 per cent, to 7,039.

The Russell 2000 index of small-company stocks gave up 35 points, or 2.4 per cent, to 1,445.

The latest losses put the S&P 500 and the Dow back into the red for the year. The Nasdaq was still slightly higher for 2018.

The arrest of Huawei's chief financial officer Meng Wanzhou has sent shockwaves through the market. Photo/AP.
The arrest of Huawei's chief financial officer Meng Wanzhou has sent shockwaves through the market. Photo/AP.

Major indexes overseas also fell sharply. The DAX in Germany dropped 3.9 per cent, while France's CAC 40 lost 3.7 per cent. The FTSE 100 in Britain declined 3.6 per cent.

Canadian authorities arrested the chief financial officer of China's Huawei Technologies on Wednesday for possible extradition to the US.

Meng is a prominent member of Chinese society as deputy chairman of the board and the daughter of company founder Ren Zhengfei. China has demanded Meng's immediate release.

The arrest came days after President Donald Trump met with Chinese President Xi Jinping to discuss the two nation's escalating trade dispute.

Markets rallied on Monday on news that Trump and Xi had agreed at the summit over the weekend to a temporary, 90-day stand-down in the two nations' escalating trade dispute. That optimism quickly faded as scepticism grew that Beijing will yield to US demands anytime soon, leading to a steep sell-off in global markets on Tuesday.

"Trade tensions aren't going away," Schaffer said.

The renewed jitters over the implications that Meng's arrest could have on US-China trade negotiations weighed on big exporters Thursday. Boeing slumped 6.3 per cent to US$320.96.

The news also resulted in another down day for markets in Asia.

Hong Kong's Hang Seng index tumbled 2.5 per cent and Japan's benchmark Nikkei 225 fell 1.9 per cent. Australia's S&P/ASX 200 lost 0.2 per cent, while South Korea's Kospi sank 1.6 per cent. Shares also fell in Taiwan and all other regional markets.

OPEC countries gathered in Vienna Thursday to find a way to support the falling price of oil. Analysts predicted the cartel and some key allies, like Russia, would agree to cut production by at least 1 million barrels per day. OPEC heavyweight Saudi Arabia indicated it was in favour of such a cut.

The expectation did not keep the price of oil from falling, however, as investors focused on the potential economic disruption from any escalation in the US-China trade dispute.

Benchmark US crude sank 4.5 per cent to US$50.53 a barrel in New York. Brent crude, used to price international oils, slid 4.4 per cent to US$58.88 per barrel.

The dollar weakened to 112.47 yen from 113.19 yen late Wednesday. The euro rose to US$1.1362 from US$1.1342.

- Associated Press