Stocks sink as investors weigh Turkey risks

U.S. stocks sank sharply in opening trade Friday amid concerns about Turkey’s economic crisis. 

Turkey’s currency hit a record low of 6.24 per dollar and has fallen more than 70 percent percent since the start of the year. The lira has been weighed down by growing concerns over the economic policies of President Recep Tayyip Erdogan and a dispute with the U.S. over Turkey’s detention of an American evangelical pastor on espionage and terror-related charges.

Raising the pressure, President Donald Trump vowed in a tweet to double U.S. tariffs on Turkish steel and aluminum imports, to 50 percent and 20 percent, respectively. 

“Our relations with Turkey are not good at this time!,” he said.

The lira fell further after Mr. Trump’s tweet.

The Dow fell 228 points, or 0.9 percent, to 25,349 shortly after the start of trade, while broader S&P 500 and tech-heavy Nasdaq also dipped.

American exports of agricultural products to Turkey totaled $1.4 billion in 2016, making it the 18th largest agricultural export market for U.S. farmers. Leading domestic export categories include cotton ($495 million), tree nuts ($361 million), distillers’ grains ($137 million), soybeans ($58 million), and tobacco ($51 million).

The U.S. slapped sanctions on two Turkish officials earlier this month over a detained American pastor who is being tried on espionage and terror-related charges.

Market analysts warn that Turkey’s deteriorating economy could hurt other emerging economies. World stock markets also fell Friday, particularly in Europe, as investors worried about risks of contagion.

Investors are assessing the financial sector’s exposure to the country’s currency and budget woes, although analysts say U.S. and western banks have limited exposure to Turkey. They also say the eurozone is healthier, making it better able to withstand economic shocks. 

© 2018 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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