China Fears Drive Down Stocks

The Dow Jones Industrial Average is down by 18 points, to 10,549, in trading today on continued fears that inflation in China will throw a wrench into trade, adversely affecting significant portions of the American economy that depend on stability in trade with the Asian giant.

Even though the trade deficit has decreased and jobless claims for February were favorable, inflation in China rose by 2.7% last month - spurring renewed fears that the trend of rising inflation will continue. In January, Chinese inflation rose by 1.5%.

The fear is that companies will tighten international business, specifically imports, due to higher prices. Such a move threatens to limit the upward movement realized lately in the major stock indices.