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US stocks fall sharply over government shutdown fears, rising interest rates

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Traders work on the floor at the opening bell of the Dow Industrial Average at the New York Stock Exchange on December 6, 2018 in New York. (AFP photo)

The US stock market has tumbled again this week as the Federal Reserve’s latest interest rate hike and the threat of a partial US government shutdown fueled investor anxieties.

Wall Street suffered its second straight day of losses on Thursday. A bruising December has set up the US financial markets for its worst year since the economic crisis in 2008.

The US central bank, known as the Fed, raised interest rates on Wednesday for the fourth time this year, spooking investors already worried about slowing economic growth.

The Dow Jones Industrial Average ended 2.0 percent lower at 22,859.60, a loss of 460 points.

The S&P 500 slid 1.6 percent to 2,467.42, while the Nasdaq Composite Index slumped 1.6 percent to 6,528.41.

Adding to the gloom was the possibility of a partial US government shutdown on Friday.

US President Donald Trump said Thursday he will not sign a congressional bill for government funding because it fails to include a budget for the construction of a wall on the US-Mexico border.

Trump’s rejection of the bill sent lawmakers scrambling for a new compromise, although Democrats have stood firm saying they will not support a spending measure that funds Trump’s border wall.

Analysts also said the US indictment of two alleged Chinese hackers tied to Beijing’s security services reminded investors of the growing tensions in US-China trade relations.

The US Justice Department announced Thursday the indictment of Zhu Hua and Zhang Shilong, who allegedly hacked dozens of companies in multiple countries, including the US.

“We have a trade war, the economy weakening, and now the possibility of a shutdown,” said Peter Cardillo of Spartan Capital Securities. “All that is feeding by itself.”

Gloomy corporate results and forecasts also weighed on US stocks.


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