Stocks drop again due to trade war
Banks and technology companies drove a broad slide in stocks on Wall Street Monday afternoon that knocked the Dow Jones Industrial Average more than 400 points lower.
The sell-off adds to losses that the market racked up last week amid heightened anxiety over the U.S. Chinatrade war. An escalation in tensions this month between the world’s largest economies has stoked worries that the fallout from the costly trade conflict will undercut an already slowing global economy. Traders have responded by selling stocks and buying government bonds.
“Trade and the concern that as this escalates it continues to wear on confidence to a point that this actually causes a recession, that’s what people are wrestling with,” said Ben Phillips, chief investment officer at EventShares.
Traders continued to shift money into bonds Monday, sending bond prices higher. That pulled down the yield on the 10year Treasury note to 1.65% from 1.73% late Friday. The yield is used as a benchmark for interest rates on mortgages and other consumer loans.
The drop in bond yields weighed on financial sector stocks. Bank of America fell 2.5% and Citigroup gave up 2.9%. Credit card issuer Synchrony Financial slid 3.7% and Capital One Financial dropped 2.5%.
Technology, health care and consumer discretionary sector stocks accounted for much of the market’s decline. Symantec dropped 6.2%, Nektar Therapeutics slumped 10.8% and Tractor Supply fell 4.6%.
Real estate and utilities stocks posted the smallest declines. Traders usually seek the shelter of utilities and bonds when they want a more secure place to put their money because of concerns over economic growth.
The Labor Department will release its consumer price index for July today and the Commerce Department will release last month’s retail sales results on Thursday.