Stocks fall on trade concerns

U.S. stocks drop on fears the tech sector could be dragged into the nation’s trade dispute with China.

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 the broadening trade dispute between the United States 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 Trump administration intends to limit exports of some high-tech products to China and limit investment in tech firms by companies with substantial Chinese ownership. Treasury Secretary Steven T. Mnuchin suggested the investment restrictions wouldn't be limited to China, and the losses deepened. The Dow sank as much as 496 points.

The market recovered some of those losses after Peter Navarro, one of President Trump's top trade advisors, told CNBC that there was no plan for investment restrictions and that the administration's investigation 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 tech firms in the Standard & Poor’s 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 less vulnerable to tariffs than other sectors such as manufacturing.

U.S. taxes 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. Few investors expect a full-blown trade war, but Frederick said talks appear to be going in the wrong direction. He expects more market volatility.

The S&P 500 index slid 37.81 points, or 1.4%, to 2,717.07, its biggest loss since April 6. The Dow fell 328.09 points, or 1.3%, to 24,252.80. The Nasdaq composite sank 160.81 points, or 2.1%, to 7,532.01. The Russell 2000 index declined 28.07 points, or 1.7%, to 1,657.51.

Shares of chipmaker Micron Technology, which gets half its revenue from China, sank 6.9% to $53.16. Advanced Micro Devices fell 4.4% to $15.11. Nvidia slid 4.7% to $239.12.

Retailers and other consumer-focused companies fell as investors sold some of the stocks that have done the best this year. Amazon retreated 3.1% to $1,663.15. Netflix sank 6.5% to $384.48.

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

Bond prices rose. The yield on the 10-year Treasury note fell to 2.87% from 2.89%.

Cruise lines’ stocks dropped after Carnival cut its annual profit forecast, citing the rising cost of fuel. Carnival fell 7.9% to $58.54.

Gray Television jumped 16% to $14.85 after the broadcaster said it will combine with Raycom in a deal the firms valued at $3.6 billion.

Campbell Soup rose 9.4% to $42.23 after the New York Post said Kraft Heinz is interested in buying the company.

Benchmark U.S. crude fell 0.7% to $68.08 a barrel. It climbed 4.6% on Friday, its biggest one-day gain since late 2016. Brent crude, used to price international oils, dropped 1.1% to $74.73 a barrel. OPEC countries agreed Friday to produce more oil, but investors aren't sure the cartel will produce as much crude oil as it says it will.

Wholesale gasoline fell 0.9% to $2.05 a gallon. Heating oil fell 1.2% to $2.10 a gallon. Natural gas fell 0.7% to $2.92 per 1,000 cubic feet.

Gold edged down 0.1% to $1,268.90 an ounce. Silver fell 0.8% to $16.33 an ounce. Copper fell 1.3% to $2.99 a pound.

The dollar fell to 109.45 yen from 109.91 yen. The euro rose to $1.1704 from $1.1663.