Stocks skid on trade worries
Concerns pull down technology sector
NEW YORK — U.S. stocks skidded Monday as investors grew concerned that technology companies could be pulled into the broadening trade dispute between the U.S. and China. Indexes in Europe and Asia also fell.
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 Donald 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 fullblown trade war, Mr. 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. Mr. 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 smallercompany 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.