Stocks slide after tar­iff threat

The News-Times - - BUSINESS -

Fresh mar­ket jit­ters over the possibilit­y of an es­ca­la­tion in the costly trade war be­tween the U.S. and China pulled stocks broadly lower on Wall Street Mon­day.

The de­cline, which grad­u­ally lost momentum after an ini­tial steep slump, came a day after Pres­i­dent Don­ald Trump threat­ened to raise tar­iffs on goods im­ported from China. Trump com­plained that the trade talks be­tween the two coun­tries are mov­ing too slowly.

In­vestors have been ex­pect­ing Wash­ing­ton and Bei­jing to re­solve their dam­ag­ing trade dis­pute after both sides sent sig­nals in re­cent months that talks were pro­gress­ing. Hopes for an ac­cord be­tween the world’s two largest economies con­trib­uted to the big run-up in stock prices in the U.S. and China so far this year. The S&P 500 and Nas­daq hit all-time highs last week.

U.S. com­pa­nies with heavy busi­ness in­ter­ests in China bore the brunt of the sell­ing Mon­day, par­tic­u­larly tech­nol­ogy and in­dus­trial com­pa­nies. Banks also fell sharply. Health care stocks rose.

Still, the wave of sell­ing eased as the day went on, a sign that in­vestors’ trade deal hopes haven’t dimmed en­tirely. Rep­re­sen­ta­tives from both sides were set to meet this week in Wash­ing­ton.

“You’ve seen that the sell­off has been so far con­tained and part of that is the per­cep­tion that the pres­i­dent has done this be­fore,” said Ma­rina Sev­eri­novsky, in­vest­ment strate­gist at Schroders.

The S&P 500 dropped 13.17 points, or 0.4 per­cent, to 2,932.47. At one point, the bench­mark in­dex had been down 1.6 per­cent.

The Dow Jones In­dus­trial Av­er­age fell 66.47 points, or 0.3 per­cent, to 26,438.48. It had been down as much as 471 points in the first few min­utes of trad­ing.

The Nas­daq slid 40.71 points, or 0.5 per­cent, to 8,123.29. The Russell 2000 in­dex of small com­pany stocks bucked the trend, adding 0.95 points, or 0.1 per­cent, to 1,614.98.

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