Turmoil on Wall Street continues
11 December 2018
Wall Street had another turbulent day yesterday with the Dow moving in a range of more than 600 points. It closed marginally up, by 34 points, after dropping by more than 500 points in the opening two hours of trading.
The market turmoil was the product of several factors, including: the decision by British Prime Minister Theresa May not to go ahead with a parliamentary vote on the Brexit deal with the European Union; a Chinese court decision brought by the US high-tech firm Qualcomm against Apple; concerns over growth in the US and the global economy; and the continuing impact of the US-China trade war.
The news that May had pulled the plug on the vote in parliament, after saying she faced defeat by a “significant margin,” sent stocks down in the morning session as the prime minister announced she would begin a tour of European capitals to seek a better deal.
The director-general of the business lobby group CBI, Carolyn Fairbairn, summed up the mood in the corporate world, describing the decision as “another blow” for companies looking for clarity.
“Investment plans have been paused for two-and-a-half years. Unless a deal is agreed quickly, the country risks sliding towards a national crisis,” she said.
But there is virtually no prospect of a rapid solution. European Council president Donald Tusk said the EU was ready to talk about how to “facilitate” the agreement with the UK but said there would be no renegotiation and May has not indicated when she might bring a revised deal back to parliament.
News out of China that a court had ruled in favour of Qualcomm against Apple over intellectual property and had banned sales of iPhone models was another factor in the initial market slide. The…