Stocks skid as trade worries pull technology companies lower

NEW YORK » U.S. stocks slumped Monday as investors grew concerned that the technology sector, a pillar of the long-running bull market, could be dragged into to the broadening trade dispute between the U.S. and China. The Dow Jones industrial average fell for the ninth time in 10 days.

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 full-blown trade war, 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. Frederick said that is likely to lead to more market volatility.

The S&P 500 index of technology companies and the index of consumer-focused companies are both up 10 percent this year. The S&P 500 is up 1.6 percent.