U.S., CHINA
edge closer to trade war.
NEW YORK — Big industrial and technology companies skidded Tuesday as the trade dispute between the U.S. and China threatened to reach a boil. Smaller companies less focused on overseas trade fared better, as did dividendpaying stocks.
The Dow Jones industrial average fell for the sixth day in a row, losing 287.26 points, or 1.1 percent, to 24,700.21. The S&P 500 index gave up 11.16 points, or 0.4 percent, to 2,762.59. The Nasdaq composite fell 21.44 points, or 0.3 percent, to 7,725.58.
International markets suffered steeper losses. Hong Kong’s Hang Seng index sank 2.8 percent, its biggest decline since February, and Germany’s DAX lost 1.2 percent.
Oil and copper fell. Both are commodities that would be susceptible if a trade dispute caused a slowdown in global economic growth. Cautious investors moved money into bonds.
President Donald Trump told the U.S. trade representative to identify $200 billion in goods for a potential 10 percent tax, and China said it would respond with duties of its own. In a statement, Trump said that if China retaliated, he would order yet another $200 billion in tariffs. China doesn’t import enough goods from the U.S. to match the scale of Trump’s proposals, but it could sanction U.S. products or companies through other means.
Just days ago, the U.S. and China each announced 25 percent taxes on $50 billion in imports from the other. While the dollar amounts are rising rapidly, the countries still have time to negotiate, as the previously announced tariffs won’t take effect until July 6.
Stocks took bigger losses early in the day, as the Dow fell as much as 419 points. Smaller and more domestically focused companies recovered and finished with small gains, and big-dividend companies in areas like consumer products rose as well.
The Russell 2000 index of small-company stocks gained 0.99 point, or 0.1 percent, to a record 1,693.45. The index is up 10.3 percent this year while the S&P has risen 3.3 percent and the Dow has taken a small loss.
Kate Warne, investment strategist for Edward Jones,
said investors are concerned about what they’re seeing, but they still think the U.S. and China will work out their differences.
“There’s concern, but there’s not overall great worry at this stage,” she said. “We are certainly taking the first steps toward a trade war, and
the more tit-for-tat actions are taken, the harder it is to pull back.”
In Europe, the CAC 40 of France fell 1.1 percent and the FTSE 100 in London slipped 0.4 percent. The losses were even heavier in Asia, where Tokyo’s Nikkei 225 retreated 1.8 percent and Seoul’s Kospi gave up 1.5 percent.
Industrial and technology companies took some of the worst losses as investors
worried that the dispute could grow more intense and drag down global economic growth. The dollar also got stronger, and the ICE-US Dollar Index hit its highest level since July. That makes U.S. goods more expensive in other markets.
Aerospace company Boeing dropped 3.8 percent to $341.12, and construction and miningequipment maker Caterpillar shed 3.6 percent to $143.30.
Technology giant Apple fell 1.6 percent to $185.69.
Companies that make cars, steel and aluminum, and chemicals also took heavy losses. So did shares of Chinese companies listed in the U.S. E-commerce company Alibaba slid 2 percent to $204.43, and search engine Baidu declined 2.5 percent to $262.11.
The euro sank to $1.1575 from $1.1615. The dollar fell to 110.07 yen from 110.44 yen.