United States restrictions on Chinese investment next front in trade dispute

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Stocks fell in midday trading Monday, with the Dow Jones industrial average down as much as 446 points, amid reports of protectionist policy pushes by the Trump administration that would ramp up trade tensions on multiple fronts.

Chinese investment has provided jobs and tax income for the U.S., and it should view commercial activities "objectively", Foreign Ministry spokesperson Geng Shuang told reporters in Beijing on Monday. Amazon shares fell more than 3.5%, while shares of Google and Facebook fell 3.67% and 3.77%, respectively.

Last Monday, President Donald Trump said he asked the United States trade representative to identify an additional $200 billion worth of Chinese goods for a 10 per cent tariff.

"People are scared", said Wayne Kaufman, chief market analyst at Phoenix Financial Services in NY.

The Dow, a narrow gauge of 30 US stocks, has declined in nine of the past 10 trading days - a remarkably long losing streak that adds up to a 4.6 per cent decline.

Spokespersons for the Treasury and the Commerce Department did not respond to requests for comment on their investment and export control plans. Among big USA movers, Intel Corp. fell 3.4 per cent, Visa Inc. fell 3.2 per cent and Boeing Co. fell 2.2 per cent.

Airbus could stand to benefit if China's looming trade war with the United States prompts Beijing to favour the European aerospace giant over USA rival Boeing. That triggered threats of further tariffs on European cars from Trump.

Harley-Davidson shares fell nearly 6% after the firm said it would absorb the higher costs of new tariffs on motorcycles imposed by the European Union, adding millions to its expenses.

The growing disputes have led investors to take refuge on safer ground. But defensive Canadian utilities and US consumer staples also struggled, echoing some of the more dramatic downturns that defined the stock market earlier this year.

Strategists at Bank of America Merrill Lynch pointed out that a yield curve inversion (where 2-year bond yields are higher than 10-year bond yields) have preceded all seven of the past recessions, going back to 1970.

Gold hovered near last week's six-month low as investors chose Treasuries over bullion. The OPEC cartel of oil producers agreed at a summit over the weekend in Vienna to ease supply cuts next month, a move analysts expect to bring 700,000 to 1 million additional barrels a day to the market in coming months.

US crude CLcv1 fell 0.73 percent to settle at $68.08 per barrel and Brent LCOcv1 settled at $74.73, down 1.09 percent on the day.

The Turkish lira rose on expectations of a stable government after Tayyip Erdogan and his ruling AK Party claimed victory in presidential and parliamentary polls.