Dow sinks 400 points, oil prices slide amid fears of economic slowdown

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Stocks sank in Monday morning trading — extending a sell-off that set the Dow back nearly 1,000 points on Friday — as coronavirus lockdowns in China rattled Asian markets and sent oil prices tumbling amid worries of an economic slowdown.

The Dow Jones industrial average was down about 400 points, or 1.2 percent, shortly after the opening bell. The blue-chip index shed more than 981 points on Friday, its biggest decline of the year as it wrapped up its fourth losing week in a row. It has shed about 8 percent since the start of the year.

The broader S&P 500 fell 1.3 percent on Monday, while the tech-heavy Nasdaq dropped 0.8 percent.

Analysts attributed last week’s sell-off to the increasingly hawkish tone from the Federal Reserve on interest rates. Investors had already been expecting a series of 0.25 percent rate hikes, but Fed Chair Jerome H. Powell made clear last week that a 0.5 percent increase is a distinct possibility at the May meeting. Meanwhile, St. Louis Fed chief James Bullard has said 0.75 percent should not be ruled out.

But Monday’s declines coincide with developments out of China, where spiking coronavirus cases have prompted the government to limit transit in an attempt to prevent more infections. Asian stocks tanked, with Hong Kong’s Hang Seng Index sliding 3.7 percent and the Shanghai composite index tumbling 5 percent.

Oil prices also fell sharply, with West Texas Intermediate crude, the U.S. benchmark, erasing 5.3 percent to $96.71 per barrel. Brent crude, the international benchmark, 5 dived percent.

Gas prices are up a few cents per gallon from where they stood last week, but are down roughly 10 cents since late March. The national average stood at $4.12 on Monday, according to AAA.

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