Bank stocks weaken, but smaller firms do well despite trade worries
NEWYORK— Banks and other large U.S. stocks fell Thursday, but smaller companies climbed, making for a mixed finish on Wall Street. Trade issues again weighed on the market as representatives of the auto industry told Congress they opposed tariffs on imported cars and car parts being proposed by the Trump administration.
Major banks fell as interest rates decreased. Weak second-quarter results also weighed on American Express and Bank of New York Mellon. President Donald Trump told CNBC he is “not happy” the Federal Reserve has been raising interest rates, which had little effect on the stock market but did send the dollar slightly lower.
Companies that make and distribute drugs fell after the Trump administration proposed changes to government rules on drug price rebates. Aluminum producers sank after Alcoa said the U.S. tariffs on imported aluminum are costing it at least $12 million a month.
Representatives of car manufacturers, suppliers and dealers appeared before Congress along with foreign diplomats. They were seeking to head off the Trump administration’s proposed tariffs on imported cars and car parts.
The U.S. imported $335 billion in autos and parts in 2017, so those tariffs could dwarf the taxes the administration has placed on imported steel, aluminum, and goods from China. General Motors and Daimler have both warned that tariffs could have major effects on their businesses.
Lindsey Bell, investment strategist with CFRA, said most consumers haven’t noticed the effects of the tariffs yet, but that will change if cars are taxed.
“It will significantly increase the price of a car, and the consumer will definitely pull back” on spending, she said.