Scratched summit a concern for market
NEWYORK » U.S. stocks finished mostly lower Thursday as energy companies skidded along with oil prices. The market dropped after President Donald Trump said he canceled a meeting with North Korean leader Kim Jong Un, but recovered most of those losses.
Crude oil futures and energy companies fell as investors reacted to reports that OPEC nations may start producing more oil. Banks fell as interest rates edged lower, and car companies including Fiat Chrysler and Toyota dropped as the Trump administration considered tariffs on imported cars and car parts, amove that was criticized by the governments of China, Japan and the European Union.
The Dow Jones industrial average fell as much as 280 points in themorning, more than 1 percent, after Trump said the June meeting with Kim was off. In a letter, Trump said he was canceling the summit because of “tremendous anger and open hostility” in a recent statement by a North Korean official. Technology companies, which have led the market in recent years, took some of the biggest losses and defense contractors climbed.
The market gradually recovered those losses, and Trump later told reporters that themeeting could still happen in June or later on. Stocks finished only slightly lower than where they were before Trump’s initial announcement.
Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said investors were troubled at first by Trump and Kim’s statements about a possible nuclear war, but they’ve gotten used to it, which means the market doesn’t react as much to their statements.
“The first time the market hears these threats there’s a large reaction and after that there’s less reaction,” he said. “It’s just rhet-
oric right now and there’s no actual military conflict, (so) these moves are kind of short-lived.”
The S&P 500 index dropped 5.53 points, or 0.2 percent, to 2,727.76. The Dow Jones industrial average lost 75.05 points, or 0.3 percent, to 24,811.76. The Nasdaq composite dipped 1.53 points, less than 0.1 percent, to 7,424.43. The Russell 2000 index of smaller-company stocks edged up 0.61 points to 1,628.22.
Benchmark U.S. crude lost 1.6 percent to $70.71 per barrel in New York. Brent crude, used to price international oils, fell 1.3 percent to $78.79 a barrel in London.
Various news outlets reported that the nations of the OPEC cartel might start producing more oil in response to reduced exports from Venezuela and Iran. Greater supplies would send prices lower. Energy companies have slipped in recent days as investors anticipated that possibility. On Thursday Exxon Mobil lost 2.3 percent to $80.27 and Chevron dipped 1.6 percent to $126.61.
OPEC and a group of other major oil producers cut production last year in response to a steep drop in oil prices. U.S. crude had fallen from more than $100 a barrel in mid-2014 to as little as $26 a barrel in early 2016.