BCN-05 Turkey woes see Wall Street end week on sour note

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ZCZC

BCN-05

US-STOCKS-MARKETS

Turkey woes see Wall Street end week on sour note

NEW YORK, Aug 11, 2018 (BSS/AFP) – Wall Street fell markedly on Friday
amid investors’ fears of economic contagion from Turkey, which is locked in a
diplomatic struggle with Washington while its currency plunges.

The slide followed a tweet from US President Donald Trump announcing he
was doubling US tariffs on Turkish steel and aluminum.

The benchmark Dow Jones Industrial Average and broader S&P 500 finished
the week at a loss while the tech-heavy Nasdaq posted a slender gain.

But all three ended the day in the red: the Dow fell 0.8 percent to
25,313.07 while the S&P and Nasdaq both shed 0.7 percent to finish at
2,832.62 and 7,839.11 respectively.

Trump’s announcement came as Turkey’s embattled lira hit new record lows
against the US dollar and euro, losing more than 16 percent as strains with
the United States intensified and fears grew over the exposure of European
banks.

Meanwhile, markets are deeply concerned over the direction of economic
policy with inflation at nearly 16 percent but the central bank reluctant to
raise rates in response.

Turkey remains at loggerheads with the United States in one of the worst
spats between the two NATO allies in years over the detention for the last
two years of American pastor Andrew Brunson and a host of other issues.

Washington this month also imposed sanctions on senior Turkish officials,
angering President Recep Tayyip Erdogan and prompting retaliatory measures by
Ankara.

Alan Skrainka of Cornerstone Wealth Management said the Turkey-related
turbulence should soon subside.

“I don’t think that the Turkish situation is really important to the
global economy,” he told AFP.

“It’s a very small portion of the global economy and these problems are a
reflection of the internal political situation in the country.”

But Trump’s latest Twitter outburst was another sign the White House is
not tailoring trade policy to suit Wall Street’s immediate needs.

Shares in trade-sensitive companies fell. Boeing lost 1.3 percent and
Caterpillar shed 1.9 percent.

Meanwhile, tech giant Intel lost 2.6 percent after its shares were
downgraded to “sell” due to what Goldman Sachs called “manufacturing issues.”

Economic data showing US consumer inflation rose steadily in July,
supporting the case for another interest rate hike next month by the Federal
Reserve.

BSS/AFP/HR/0942