Stocks began the day deep in negative territory and tacked on additional losses throughout the morning before bouncing a bit from their lows in the early afternoon. The arrest of the CFO of China's Huawei took all the wind out of the sails of those who hoped President Trump's G20 meeting with China's President Xi would lead to successful trade talks. Today's losses come on the heels of Tuesday's losses, following yesterday's market closure, and have wiped out all of the Dow's 2018 gains in the process. Oil prices are down too after the highly anticipated OPEC meeting yielded less in terms of production cuts than expected.

ECONOMIC EVENTS: In the U.S.:  

• Q3 nonfarm productivity was revised up to a 2.3% growth rate versus the 2.2% pace registered in the advance report 
• Initial jobless claims fell 4,000 to 231,000 in the week ended December 1
• ADP reported a 179,000 rise payrolls in November, undershooting the 195,000 consensus estimate
• The trade deficit widened 1.7% to $55.5B in October, which was close to expectations
• Markit's services PMI dipped 0.1 point to 54.7 in November's final reading from a 54.8 figure in October
• The ISM nonmanufacturing index rose 0.4 points to 60.7 in November, above forecast, after falling to 60.3 in October.
• Factory orders dropped 2.1% in October, which was close to expectations

COMPANY NEWS: Huawei Technologies CFO Meng Wanzhou, one of the vice chairs on the Chinese company's board and the daughter of company founder Ren Zhengfei, was arrested in Canada on December 1 at the request of U.S. authorities and now faces extradition to the U.S. on suspicion she violated U.S. trade sanctions against Iran, according to media reports. Sources previously said U.S. authorities were probing Huawei since "at least" 2016 for shipping U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws. According to prior analyst reports, Huawei accounted for nearly 17% of Lumentum's (LITE) sales in FY17, about 15% of FY17 sales for Oclaro (OCLR) and 11% of FY17 sale for Finisar (FNSR). The company competes in China with ZTE (ZTCOY), Infinera (INFN) and Ciena (CIEN).

Facebook (FB) has been in the spotlight again this week after the U.K. parliament released 250 pages of seized Facebook and Mark Zuckerberg emails, which suggest that the social media giant let companies have special access to user data if they spent big on advertising. Meanwhile, Stifel analyst Scott Devitt downgraded Facebook to Hold as he believes the company has made too many enemies, including politicians and regulators, to not experience “long-term negative ramifications to its business.”

Lam Research (LRCX) announced yesterday while the market was closed for trading that the board of directors has accepted Martin Anstice's resignation as chief executive officer and a member of the board as the company investigates allegations against Anstice of misconduct in the workplace and conduct inconsistent with the company's core values. However, Lam noted that the alleged conduct did not involve financial misconduct, nor did it relate to questions regarding the integrity of the company's financial systems or controls, and reaffirmed its previous guidance. Shares of Lam are down 3.5% near midday following yesterday's disclosures.

MAJOR MOVERS: Among the noteworthy gainers was Hortonworks (HDP), which rose 9% after Cloudera (CLDR) said that it and Hortonworks will hold shareholder meetings to vote on their proposed merger in late December 2018, with completion of their merger to follow soon thereafter. Cloudera shares were 9% higher after the company's earnings report as well. Also higher was Okta (OKTA), which gained 11% after reporting quarterly results. Additionally, TheStreet (TST) jumped 31% after announcing that it has entered into a definitive agreement to sell its institutional business units, The Deal and BoardEx, for $87.3M to Euromoney Institutional Investor. 

Among the notable losers was NeoPhotonics (NPTN), which fell 23% after B. Riley FBR analyst Dave Kang downgraded the stock to Neutral from Buy on Huawei uncertainty. Also lower was Signet Jewelers (SIG), which slid 17% after reporting quarterly results. 

INDEXES: Near midday, the Dow was down 512.38, or 2.05%, to 24,514.69, the Nasdaq was down 55.99, or 0.78%, to 7,102.44, and the S&P 500 was down 45.65, or 1.69%, to 2,654.41.