The Dow is down 400 points due to the weak economic outlook and concerns about China's trade


A report that the Trump administration rejected China's offer of trade talks preparing to drag stocks lower.

The Dow fell as much as 419 points. The S & P 500 fell 1.6% and Nasdaq was 1.9% lower. US crude, which has recovered in recent weeks, fell 2.8% on Tuesday.
The White House has invited two Chinese trade representatives, according to the Financial Times. They are scheduled to visit the United States this week to prepare for the upcoming trade talks between China's deputy prime minister and US Trade Representative Robert Lighthizer next week. The Trump administration cites a lack of progress on some of the main issues for cancellation of this week's meeting.

The Dow, which has dropped 300 points, fell 100 points again in the report.

Closed Monday for Martin Luther King Jr. Day, the market got its first opportunity Tuesday to react to the 2018 China GDP report and the IMF's global economic outlook presented at the World Economic Forum in Davos, Switzerland. Both reports were released Monday.

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The IMF lowered its growth forecast for its 2019 World Economic Outlook by 0.2 percentage points to 3.5%, the second downward revision. This cites the economic downturn in Germany and Turkey for rating downgrades. The German economy has the worst year since 2013, although it may avoid a recession.

But the report explained that Brexit did not agree and an unresolved trade war between the United States and China remained the biggest risk known to grow.

Also Monday, China reported that its economy grew 6.6% in 2018. It was the weakest annual performance since 1990.

China's growth has lost momentum following government efforts to try to control high levels of debt. He also began to feel the impact of the trade war with the United States, which has generated new tariffs on more than $ 250 billion of Chinese exports.

And Tuesday, the National Association of Realtors reported that US home sales fell 6.4% last month. It marked the weakest performance since November 2015. Home sales have dropped lower throughout most of 2018 – but none has been close to the declining drama in December. Existing home sales fell 10.3% for this year.

The Federal Reserve has been closely watching the housing market for signs of deterioration as it weighs on the next step. It could continue to raise interest rates to fight inflation or slow down the campaign to increase interest rates to avoid a period of stalled economic growth in its final step.

When the income season is underway, investors will see company sales and profit growth for signs of an economic slowdown.

Dow components Johnson & Johnson (JNJ) and Travelers (TRV), both reported earnings Tuesday that beat Wall Street expectations, but their shares both fell on Tuesday, dragged down by the broader market.
Stanley Black and Decker (SWK) said 2019 revenue would miss analyst estimates, saying "there are many external obstacles." Shares fell 13%.
But eBay (EBAY) shares rose 7% after after hedge fund Elliott Management activists said they took shares in the company – and wanted to break it down by spinning off StubHub ticket resellers.


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