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The Journal Gazette

  • Associated Press Tourists and Turkish people wait outside a luxury store in an upscale neighborhood of Istanbul on Tuesday as the Turkish lira sinks to a record low.

  • Erdogan 

Wednesday, August 15, 2018 1:00 am

Turkey threatens boycott

Erdogan says nation will stop importing electronics from US

SUZAN FRASER | Associated Press

Market rally

U.S. stocks rallied Tuesday as banks, retailers, and smaller companies jumped. That helped the market recover most of its losses from the previous two days.

On Tuesday

• The S&P 500 index jumped 18.03 points, or 0.6 percent, to 2,839.96.

• The Dow Jones Industrial Average picked up 112.22 points, or 0.4 percent, to 25,299.92.

• The Nasdaq composite rose 51.19 points, or 0.7 percent, to 7,870.89.

• The Russell 2000 index of smaller-company stocks surged 17.26 points, or 1 percent, to 1,692.58.

For the year

• The S&P 500 is up 166.35 points, or 6.2 percent.

• The Dow is up 580.70 points, or 2.3 percent.

• The Nasdaq is up 967.50 points, or 14 percent.

• The Russell 2000 is up 157.07 points, or 10.2 percent.

ANKARA, Turkey – Turkey's president appeared to escalate a dispute with the United States that has helped foment a Turkish currency crisis, claiming Tuesday that his country will boycott U.S.-made electronic goods. Behind the scenes, however, diplomats resumed contact to ease tensions.

Addressing a conference of his ruling party faithful, Recep Tayyip Erdogan added fuel to the spat with the U.S., even as local business groups called on his government to settle it.

Investors seemed to look through the fiery rhetoric, pushing the lira off record lows on confirmation that Turkish and U.S. government officials met on Monday.

“We will implement a boycott against America's electronic goods,” Erdogan told the conference. He suggested Turks would buy local or Korean phones instead of U.S.-made iPhones, though it was unclear how he intended to enforce the boycott.

The move is seen as retaliation for the United States' decision to sanction two Turkish ministers over the detention of an American pastor on terror-related charges, and to double tariffs on Turkish steel and aluminum imports.

Behind the scenes, however, diplomatic dialogue appears to have resumed. U.S. officials say National Security adviser John Bolton had met with the Turkish ambassador to Washington on Monday.

That helped ease the turmoil in financial markets, with the Turkish lira stabilizing near record lows. It was up about 5 percent on Tuesday, at about 6.52 per dollar, having fallen 42 percent so far this year, with most of those losses coming in recent weeks.

Investors are worried not only about Turkey's souring relations with the U.S., a longtime NATO ally, but also Erdogan's economic policies and the country's high debt accumulated in foreign currencies. Independent economists say Erdogan should let the central bank raise interest rates to support the currency, but he wants low rates to keep the economic growth going.

In a joint statement issued Tuesday, the industrialists' group TUSIAD and the Union of Chambers and Commodity Exchanges called on the government to allow the central bank to raise interest rates to help overcome the currency crisis.

The business groups also urged diplomatic efforts with the United States and an improvement in relations with the European Union, which is Turkey's major trading partner.