US close: Markets sink lower as Trump turns attention to Chinese investment
US stocks ended Monday well into the red amid weakness in the technology and energy sectors, a warning from Harley-Davidson on the impact of EU tariffs, and more trade threats from president Trump - all of which dented risk appetite.
Dow Jones I.A.
38,239.66
04:30 15/10/20
Nasdaq 100
17,718.30
12:15 26/04/24
The Dow Jones Industrial Average ended the session down 1.33% at 24,252.80, the S&P 500 was off 1.37% at 2,717.07, and the Nasdaq 100 ended the day 2.21% lower at 7,038.17.
Neil Wilson, chief market analyst at Markets.com, said that 24,280 was "the magic number" for the Dow, adding that a close below that level would be a sign that the market was prepared to test new lows.
Trump expanded his war of rhetoric, threatening to curb Chinese investments in the US for reasons of "national security", with a draft series of restrictions on inbound Chinese investments due to be published later in the week.
It came after threats at the end of last week of a 20% tariff on all European cars, after the EU began implementing tariffs on Friday on $3.2bn of US imports.
“Things worsened as the US markets got involved this Monday, the trade war fearing losses turning even uglier as the afternoon wore on,” said Spreadex analyst Connor Campbell.
“Beyond the basic fact of the rumoured next round of China-attacking trade restrictions set to be announced by Trump this week, ones specifically targeting the tech sector, an announcement from Harley-Davidson seems to have played its role in the bloodying of trading boards this Monday.
“The motorcycle firm said it would be shifting production of bikes for EU destinations out of the US in order to avoid the ‘substantial’ burden of the retaliatory tariffs introduced by the European Union last week.”
Harley-Davidson, which finished down 5.97%, also said that EU tariffs were likely to cost the company $90m to $100m on an annual basis.
On the data front, a widely-followed gauge of US economic activity turned lower in May, but remained above levels seen the previous year.
The Federal Reserve Bank of Chicago's national activity index slipped from a reading of +0.42 points for April to -0.15 in May, with its three-month moving average slowing from a reading of +0.48 in the month before to +0.18.
Production-related indicators accounted for the bulk of the move to the downside, contributing -0.29 points in May, versus +0.33 in April.
The contribution from personal consumption and housing was slightly more negative as well, with their contribution slipping from -0.03 to -0.04.
In the same month a year ago, the activity index stood at -0.19, while the three-month moving average was at +0.10.
Data from the Commerce Department, meanwhile, showed that sales of new US single-family homes rose in May.
New home sales were up 6.7% to a seasonally-adjusted annual rate of 689,000 from a revised rate of 646,000 in April.
Economists had been expecting a rate of 667,000. Compared with May 2017, new home sales were up 14.1%.
The median price of a new home was $313,000, down from $318,500 in April.
In corporate news, energy shares took a hit as Brent crude gushed lower after an initial surge following Opec's decision last Friday to boost production.
Chevron and Exxon Mobil were both in the red, by 1.98% and 1.97% respectively.
Semiconductor stocks were also on the back foot on the news that Trump was planning to further restrict China's investment in US technology companies.
General Electric fell 2.3% after saying it agreed to sell its distributed power business to private equity firm Advent International for $3.25bn.
Education Realty Trust bucked the trend, pushing 1.3% higher after announcing it had agreed to be bought by Greystar Student Housing Growth and Income Fund in an all-cash deal valued at around $4.6bn.
Dow Jones - Risers
Walmart Inc. (WMT) $86.46 1.95%
American Express Co. (AXP) $98.54 1.35%
Coca-Cola Co. (KO) $43.59 0.76%
Procter & Gamble Co. (PG) $77.79 0.46%
Johnson & Johnson (JNJ) $122.58 -0.20%
United Technologies Corp. (UTX) $124.61 -0.21%
Verizon Communications Inc. (VZ) $49.60 -0.32%
Pfizer Inc. (PFE) $36.38 -0.36%
3M Co. (MMM) $195.81 -0.36%
Home Depot Inc. (HD) $196.38 -0.53%
Dow Jones - Fallers
Intel Corp. (INTC) $50.71 -3.41%
Visa Inc. (V) $130.93 -3.25%
McDonald's Corp. (MCD) $159.84 -2.88%
Caterpillar Inc. (CAT) $136.62 -2.40%
General Electric Co. (GE) $12.75 -2.30%
Boeing Co. (BA) $331.20 -2.27%
Cisco Systems Inc. (CSCO) $42.29 -2.11%
Exxon Mobil Corp. (XOM) $79.74 -2.02%
Microsoft Corp. (MSFT) $98.39 -2.01%
Chevron Corp. (CVX) $122.61 -1.99%
S&P 500 - Risers
Campbell Soup Co. (CPB) $42.23 9.40%
SCANA Corp. (SCG) $38.41 3.74%
FirstEnergy Corp. (FE) $36.22 3.16%
Kimberly-Clark Corp. (KMB) $103.86 2.88%
Clorox Co. (CLX) $132.41 2.72%
American Electric Power Co. Inc. (AEP) $69.03 2.49%
Kellogg Co. (K) $69.04 2.45%
NiSource Inc. (NI) $25.68 2.43%
J. M. Smucker Co. (SJM) $108.23 2.38%
CMS Energy Corp. (CMS) $46.53 2.35%
S&P 500 - Fallers
Carnival Corp. (CCL) $58.54 -7.85%
Micron Technology Inc. (MU) $53.16 -6.90%
United States Steel Corp. (X) $34.52 -6.48%
Netflix Inc. (NFLX) $384.48 -6.47%
Harley-Davidson Inc. (HOG) $41.57 -5.97%
Frontier Communications Co. (FTR) $6.17 -5.66%
Royal Caribbean Cr (RCL) $105.35 -5.52%
Marathon Oil Corp. (MRO) $20.30 -5.49%
Diamond Offshore Drilling Inc. (DO) $18.57 -5.26%
Altaba Inc. (AABA) $75.46 -5.03%
Nasdaq 100 - Risers
Mondelez International Inc. (MDLZ) $41.45 0.36%
Costco Wholesale Corp. (COST) $211.75 0.31%
Kraft Heinz Co. (KHC) $63.32 0.17%
Amgen Inc. (AMGN) $185.36 0.11%
Gilead Sciences Inc. (GILD) $71.14 0.10%
PACCAR Inc. (PCAR) $62.14 0.05%
Express Scripts Holding Co (ESRX) $79.24 0.01%
Shire Plc Ads (SHPG) $161.75 -0.06%
Tesla Inc (TSLA) $333.01 -0.19%
Take-Two Interactive Software Inc. (TTWO) $116.73 -0.20%
Nasdaq 100 - Fallers
Micron Technology Inc. (MU) $53.16 -6.90%
Netflix Inc. (NFLX) $384.48 -6.47%
Autodesk Inc. (ADSK) $129.75 -4.95%
Nvidia Corp. (NVDA) $239.12 -4.71%
Asml Holdings N.V. (ASML) $196.65 -4.71%
NetEase Inc. Ads (NTES) $248.33 -4.27%
Biomarin Pharmaceutical Inc. (BMRN) $94.88 -4.19%
Seagate Technology Plc (STX) $55.83 -4.11%
American Airlines Group (AAL) $39.68 -4.04%
JD.com, Inc. (JD) $39.18 -4.02%