Archive

Stocks skid as trade tensions pull technology companies lower | TribLIVE.com
U.S./World

Stocks skid as trade tensions pull technology companies lower

The Associated Press
983821274
Drew Angerer | Getty Images
Visitors stand on the upper level next to the day's final numbers following the closing bell at the New York Stock Exchange, June 25, 2018 in New York City. The Dow was down over 300 points for the day as the market continues to brace for more action from the Trump administration against China.
983821296
Drew Angerer | Getty Images
A trader works at his desk ahead of the closing bell on the floor of the New York Stock Exchange, June 25, 2018 in New York City.
983821152
Drew Angerer | Getty Images
Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange, June 25, 2018 in New York City.

NEW YORK — Stocks slumped Monday as investors grew concerned that the technology sector, a pillar of the long-running bull market, could be dragged into to the broadening trade dispute between the United States and China. The Dow Jones industrial average fell for the ninth time in 10 days.

Stocks sank after the Wall Street Journal and Bloomberg News reported that the administration intends to limit exports of some high-tech products to China, and will limit investment in technology firms by companies with substantial Chinese ownership. Treasury Secretary Steven Mnuchin suggested the investment restrictions wouldn’t be limited to China and the losses deepened. The Dow Jones Industrial Average lost as much as 496 points.

The market recovered some of those losses after Peter Navarro, one of President Trump’s top trade advisers, told CNBC there was no plan for investment restrictions and that the administration’s probe into alleged technology theft is limited to China.

“We hear one thing one hour and something that contradicts it the next hour or the next day,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab. “Nobody knows what to think or what to believe. It makes it really tough to invest.”

All but one of the 72 technology companies listed on the S&P 500 index fell Monday. Those companies have done far better than the broader market over the last year and a half and investors had considered them to be less vulnerable to tariffs than other sectors like manufacturing.

Taxes by the U.S. on tens of billions of dollars in imports from China, and retaliatory taxes by China on U.S. goods, are set to take effect in less than two weeks. While few investors expect a full-blown trade war, Frederick said talks appear to be going in the wrong direction.

“Every day you get closer to those particular dates it gets more worrisome,” he said. Frederick said that is likely to lead to more market volatility.

The S&P 500 index shed 37.81 points, or 1.4 percent, to 2,717.07, its worst loss since April 6. The Dow Jones Industrial Average lost 328.09 points, or 1.3 percent, to 24,252.80. The Nasdaq composite fell 160.81 points, or 2.1 percent, to 7,532.01. The Russell 2000 index of smaller-company stocks slid 28.07 points, or 1.7 percent, to 1,657.51.

Elsewhere, Harley-Davidson said it would move some production overseas to avoid tariffs the European Union is placing on motorcycles made in the U.S. Those tariffs were a response to taxes the U.S. placed on steel and aluminum from Europe. Its stock fell 6 percent to $41.57.

China is attempting to become a global leader in biotechnology, electric vehicles and other industries, and the reports said the administration wants to slow Beijing’s progress in those areas. President Donald Trump has threatened to put tariffs on hundreds of billions of dollars in Chinese imports over complaints Beijing steals or pressures foreign companies to hand over technology. He’s also pressuring China to buy more U.S.-made goods.

Chipmaker Micron Technology, which gets half its revenue from China, lost 6.9 percent to $53.16 and Advanced Micro Devices fell 4.4 percent to $15.11. Nvidia sank 4.7 percent to $239.12.

Germany’s DAX fell 2.5 percent and London’s FTSE 100 gave up 2.2 percent. France’s CAC 40 shed 1.9 percent. Hong Kong’s Hang Seng lost 1.3 percent. Tokyo’s Nikkei 225 shed 0.8 percent and in South Korea the Kospi was little changed.

Retailers and other companies focused on consumers fell as investors sold some of the stocks that have done the best this year. Amazon lost 3.1 percent to $1,663.15 and Netflix dropped 6.5 percent to $384.48.

The S&P 500 index of technology companies and the index of consumer-focused companies are both up 10 percent this year. The S&P 500 is up 1.6 percent.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.87 percent from 2.89 percent.

Elsewhere, cruise lines dropped after Carnival cut its annual profit forecast. The company cited the rising cost of fuel. Carnival fell 7.9 percent to $58.54 and competitors Royal Caribbean and Norwegian Cruises also slumped.

Investors still responded positively to deal reports. Broadcaster Gray Television jumped 16 percent to $14.85 after it said it will combine with Raycom in a deal the companies valued at $3.6 billion. Campbell Soup rose 9.4 percent to $42.23 after the New York Post said Kraft Heinz is interested in buying the company. Kraft added 0.2 percent to $63.32.

Benchmark U.S. crude dipped 0.7 percent to $68.08 per barrel in New York. It climbed 4.6 percent Friday, its biggest one-day gain since late 2016. Brent crude, used to price international oils, dropped 1.1 percent to $74.73 per barrel in London.

OPEC countries agreed to produce more oil Friday, but investors aren’t sure the cartel will produce as much crude oil as it says it will.

Wholesale gasoline lost 0.9 percent to $2.05 a gallon. Heating oil fell 1.2 percent to $2.10 a gallon. Natural gas dipped 0.7 percent to $2.92 per 1,000 cubic feet.

Gold fell 0.1 percent to $1,268.90 an ounce. Silver lost 0.8 percent to $16.33 an ounce. Copper fell 1.3 percent to $2.99 a pound.

The dollar fell to 109.45 yen from 109.91 yen. The euro rose to $1.1704 from $1.1663.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.