Wall Street cuts losses as Kudlow promises China trade talks

S&P says global credit outlook stable, but geopolitical risks over US-China trade war remain high

Stocks claw back ground lost on trade fears

While a 10-percent decline from all-time highs in a major stock index is a correction, a 20-percent drop constitutes a bear market. China earlier said no talks were ongoing.

Analysts said the market also responded to Federal Reserve Chair Jerome Powell, who said that the USA economy was growing and a turbulent stock market would not change the Fed's course to gradually raise interest rates.

What are main benchmarks doing?

Continued concerns about a US-China trade war and an underwhelming jobs report induced a spike in volatility in US markets Friday as the Dow Jones Industrial Average (DJIA) and S&P 500 Index tanked. All 30 blue-chip companies finished with losses on Friday.

Japan's benchmark Nikkei 225 index dipped 0.4 percent while South Korea's Kospi slipped 0.3 percent but Hong Kong's Hang Seng rose 1.1 percent after trading resumed following a holiday as investors caught up with the previous day's global gains. Industrial and financial stocks led the losses, down 2.7% and 2.4%, respectively.

Stocks are falling sharply again as trade tensions heat up between the USA and China.

"If the United States disregards the opposition of China and the worldwide community, and insists on unilateralist and protectionist trade practices, the Chinese side will follow through to the end and will not hesitate to fight back at any cost", the Chinese Commerce Ministry said in a statement Friday.

"The Chinese side will follow suit to the end, not hesitate to pay any price, resolutely counterattack and take new comprehensive measures in response", the ministry said via its website, citing an unnamed spokesman. "The statement added that China "doesn't want" a trade war, but is not afraid to fight one".

President Donald Trump ratcheted up the trade war rhetoric with China on Thursday evening, saying he was considering another wave of steep tariffs on the country's exports to the United States. Powell said it was too soon to know a trade battle would affect the economy.

Oil prices edged higher as fears that trade restrictions would crimp global economic growth took a back seat to declining U.S. inventories.

The US jobs report for March will be released on Friday. The US still shows the tightest labor market in almost two decades.

Craig Holke, investment strategy analyst for the Wells Fargo Investment Institute, said the market will continue to bounce around as investors worry about changes in trade that could slow down the global economy and company profits. The yield on the 10-year Treasury fell to 2.78 percent from 2.83 percent.

Among shares of industrial and materials firms, CF Industries Holdings Inc.

Caterpillar, a construction equipment maker, shed $584, or 3.9 percent, to $142.29 while farm equipment company Deere sank $5.56, or 3.7 percent, to $145.79.

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