Stocks are having their worst December since 1931

Stocks are having their worst December since 1931

A bruising December has set up Wall Street for its worst year since the financial crisis. Without a decent rally, this could be the worst December since 1931.

The major U.S. stocks indexes accelerated declines in the last hour of trading after White House trade adviser Peter Navarro said the United States and China might not reach a trade deal at the close of a 90-day negotiating window unless Beijing can agree to a profound overhaul of its economic policies.

The S&P 500 is nearly 16 percent below the peak it reached in late September.

Investors have responded to a weakening outlook for the USA economy by selling stocks and buying ultra-safe US government bonds.

The Nasdaq led Friday's plunge, dropping three percent for a total week's loss of 8.3 percent, breaking August's record low.

The market swoon is coming even as the USA economy is on track to expand this year at the fastest pace in 13 years.

On the other hand, Skechers USA Inc., Foot Locker Inc. and Deckers Outdoor Corp. moved back into positive territory just before market close.

The increasing likelihood of a partial government shutdown injected further pessimism into USA stock markets.

Among other threats: the trade dispute between the USA and China, and rising US interest rates, which act as a brake on economic growth by making it more expensive for businesses and individuals to borrow money.

Tokyo Japan Brokerage

In a sign of confidence in economic growth, the Federal Reserve raised its benchmark interest rate by a quarter point, to its highest level in a decade.

"I think clearly you have a situation here where the market has overreacted to the Fed's comments, and you see programmed trading taking over", he said in an interview with Fox Business Network. Brent crude, the standard for global oil prices, fell 1 percent to $53.82 a barrel in London.

The S&P 500 index rose 2 points, or 0.1 percent, to 2,469.

Many investors are growing anxious that corporate profits - which drive stock market gains - are poised to weaken. An immediate sell-off followed the announcement, with the Dow falling by more than 500 points during Fed Chairman Jerome Powell's press conference.

The Nasdaq fell 108.42 points, or 1.6 percent, to 6,528.41.

After early gains, bond prices headed lower.

Oil prices continued to retreat. Amazon gave up 2.8 percent.

The price of oil has also fallen sharply in recent weeks, down 40 percent from the high it reached in October, amid concerns over a glut in the market and the slowing economy.

The stock markets in France, Germany, Britain, Italy, Portugal, Spain, Tokyo and Hong Kong also fell.

More news: Guardiola backs Solskjaer to hit the ground running at Man Utd

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