Volatility kicked up in the stock market on Monday.
The Dow Jones industrial average opened with a 100-point plus gain before taking a U-turn that slid more than 400 points into the red after the Commerce Department reported weaker-than-expected construction spending for December.
The Dow’s total top-to-bottom swing was 544 points — the largest by percent since Jan. 4.
The turbulence came on low trading volume as the United States and China close in on an eagerly awaited trade agreement that could clear tariffs on $200 billion in Chinese goods sold in the United States.
The Dow landed down 204 points, or about 0.8 percent on the day, to close at 25,819 after Commerce reported that construction spending fell by 0.6 percent in December instead of the 0.3 percent gainthat economists had predicted.
The Standard & Poor’s 500-stock index closed down 0.4 percent. The tech-heavy Nasdaq composite fell about a quarter of one percent.
The momentum that has made the first two months of 2019 one of the best starts in the stock market in years came to a screenching halt.
“This is some traders taking a little money off the table,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute. “The market has been pricing in the positives on this U.S.-China trade deal. Unless we get some incredible trade agreement, we’re kind of stalled out for a while.”
It was the Dow’s worst showing since Jan. 3 and follows the index’s first down week of the year. UnitedHealth, Walgreens and McDonald’s were big drags on the Dow.
Real estate was the only S&P sector out of 11 that finished in positive territory. Health care and financial services were the big sector losers.
Ivan Feinseth of Tigress Financial Partners is bullish on a trade deal, but he cautioned that uncertaintly remains over whether President Trump will close the deal.
“Trump has a history of taking a hard left turn into crazy town,” Feinseth said. “The president is very unpredictable.”
Feinseth said that although the trade deal could be anti-climatic, he said it is more likely to be a “a powerful market catalyst that will result in companies upping their outlooks for the year.”
Stocks are up 11 percent on the year on strong economic data and on expectations that the U.S. and China will come to some sort of agreement to end the year-long trade war.
Monday’s fall follows President Trump’s criticism of Federal Reserve Chairman Jerome Powell during a long speech at the Conservative Political Action Conference over the weekend.
Trump called Powell “a gentleman that likes raising interest rates in the Fed. We have a gentleman that loves quantitative tightening in the Fed. We have a gentleman that likes a very strong dollar in the Fed.”
“Can you imagine if we left interest rates where they were, if we didn’t do quantitative tightening?” Trump said. “Taking money out of the market if we didn’t do quantitative talk, and this would lead to a little bit lower dollar.”