Tech firms lead slide as trade worries weigh on US stocks
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Tech firms lead slide as trade worries weigh on US stocks
A slide in technology companies helped pull U.S. stocks lower Monday, snapping a five-day winning streak for the market.
The sell-off came amid speculation that the Trump administration was preparing to impose tariffs on another $200 billion worth of Chinese goods. The two governments have already imposed 25 percent tariffs on $50 billion of each other’s goods, and another round of tariffs would represent a significant escalation in the trade dispute between the world’s two largest economies.
Investors used the prospect of a deeper U.S.-China trade conflict to take some profits, especially in technology stocks, the market’s biggest gainers this year. Department stores and other consumer-focused companies also accounted for a big slice of the losses. Safe-play sectors like real estate and utilities rose. Oil prices fell, erasing early gains.
The S&P 500 index fell 16.18 points, or 0.6 percent, to 2,888.80. The Dow Jones Industrial Average lost 92.55 points, or 0.4 percent, to 26,062.12.
The tech-heavy Nasdaq composite gave up 114.25 points, or 1.4 percent, to 7,895.79. The Russell 2000 index of smaller companies fell 18.17 points, or 1.1 percent, to 1,703.55. Most stocks closed lower on the New York Stock Exchange.
The U.S. has been locked in an escalating trade dispute with China, it’s biggest trading partner. Washington contends that Beijing uses predatory tactics to acquire technology know-how in an effort to overtake America’s global supremacy in technology.
Over the weekend, news reports indicated that the White House was set to announce tariffs on $200 billion more in Chinese imports as soon as Monday. Beijing has said it would swiftly retaliate against additional U.S. tariffs.
The uncertainty over the trade dispute has at times roiled the market, but not derailed it from notching gains on the strength of strong corporate earnings and a growing U.S. economy. That suggests that many investors, for now, expect both sides will ultimately work out a deal.
“It’s a short-term, immediate-term thorn in the market’s side,” said Ted Theodore, chief investment officer of TrimTabs Asset Management. “A big part of it is not knowing what the game plan is.”
Technology companies led the market’s slide. Apple lost 2.7 percent to $217.88, while Netflix slumped 3.9 percent to $350.35. Twitter fell 4.2 percent to $28.86 after an analyst cut the price target on the social media company.
Amazon.com lost 3.2 percent to $1,908.03 after The Wall Street Journal reported that the online retail giant is investigating suspected bribes and data leaks of its employees.
Several big department store chains declined. Macy’s slid 3.1 percent to $35.16. Kohl’s lost 2 percent to $79.26. Gap gave up 2.6 percent to $27.05.
Traders bid up shares in companies that got favorable news from government regulators.
Teva Pharmaceutical climbed 2.5 percent to $23.43 after the Food and Drug Administration approved the drugmaker’s preventative migraine treatment.
Express Scripts jumped 3.7 percent to $95.23 after regulators cleared the way for Cigna to buy it. Cigna rose 1.4 percent to $197.84.
Bond prices were little changed. The yield on the 10-year Treasury held at 2.99 percent.
The dollar fell to 111.18 yen from 112.03 yen on Friday. The euro strengthened to $1.1686 from $1.1632.
Oil prices declined, wiping out gains from earlier in the day.
Benchmark U.S. crude lost 0.1 percent to settle at $68.91 a barrel in New York. Brent crude, used to price international oils, fell 0.1 percent to close at $78.05 a barrel in London.
In other energy trading, wholesale gasoline slipped 0.3 percent to $1.98 a gallon, heating oil fell 0.1 percent to $2.21 a gallon and natural gas jumped 1.7 percent to $2.81 per 1,000 cubic feet.
Gold rose 0.4 percent to $1,205.80 an ounce. Silver added 0.6 percent to $14.22 an ounce. Copper gained 0.2 percent to $2.65 a pound.
Major stock indexes in Europe finished mostly lower. The DAX in Germany dropped 0.2 percent, while France’s CAC 40 lost 0.1 percent. Britain’s FTSE 100 ended flat.
In Asia, South Korea’s Kospi fell 0.7 percent and Hong Kong’s Hang Seng index tumbled 1.3 percent. Australia’s S&P/ASX 200 rose 0.3 percent. Japanese markets were closed for a national holiday.
By ALEX VEIGA , Associated Press
