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Banks, industrials fall as trade tensions hit stocks again

AP LogoBY MARLEY JAY

NEW YORK (AP) — U.S. stocks are down for the third consecutive day Wednesday as investors’ fears about tariffs and decreased international trade continue to hurt industrial companies. Banks are also falling as bond yields decline. Department stores and other retailers are losing ground after the Commerce Department said retail sales declined in February.

KEEPING SCORE: The S&P 500 index lost 17 points, or 0.6 percent, to 2,747 as of 3:20 p.m. Eastern time. The Dow Jones industrial average lost 257 points, or 1 percent, to 24,750. Earlier it fell as much as 338 points. The Dow is comprised of 30 large multinational companies and has been hit hard by concerns about tariffs, as it’s down 4 percent since Feb. 26. The Nasdaq composite fell 18 points, or 0.3 percent, to 7,492. The Russell 2000 index of smaller-company stocks declined 7 points, or 0.5 percent, to 1,584.

TRADE TROUBLES: Investors remained focused on the potential for new trade actions from President Donald Trump and leaders in Europe warned about the risks of trade disputes. European Union head Donald Tusk urged Trump to pursue more cooperation with Europe instead of putting tariffs on European goods.

The EU wants an exemption from the tariffs on aluminum and steel imports that Trump recently announced and has said it could retaliate with tariffs of its own. Meanwhile German Chancellor Angela Merkel said she can’t predict if those talks will succeed.

Stocks slumped after Trump announced his tariff plans. They recovered somewhat after the administration said it would grant exemptions to some countries, but have slipped again as investors worried about more tensions with Europe and China.

“Since the correction investors have been a little bit more sensitive to risk,” said Karyn Cavanaugh, senior market strategist at Voya Investment Strategies. “Before the correction investors were almost bulletproof.”

REACTION: Aerospace and defense giant Boeing slid $9.37, or 2.8 percent, to $329.30 and it’s down 6 percent this week. Arconic, which uses a lot of aluminum in making products for aerospace companies, lost $1.05, or 4.2 percent, to $23.90. Defense contractors including Raytheon and Lockheed Martin also declined, as did airlines.

Cavanaugh said a trade war is unlikely because the Trump administration is unlikely to take any steps that seriously harm global trade. While investors have sold industrial stocks, she said it’s possible some of them will benefit from changes to NAFTA or other trade agreements.

“You have to be careful when you’re trying to Washington-proof your portfolio because you don’t know what’s going to happen,” she said.

BONDS: Bond prices climbed, sending yields lower. The yield on the 10-year Treasury note fell to 2.81 percent from 2.84 percent, a significant move. That helped send bank stocks lower. Declining yields force interest rates on loans like mortgages lower, which hurts banks’ profits. Citigroup fell $1.41, or 1.9 percent, to $73.49 and Bank of New York Mellon lost $1.33, or 2.4 percent, to $54.64.

ECONOMIC INDICATORS: Retail sales dipped 0.1 percent last month as car sales declined, and so did purchases at gas stations and department stores. Kohl’s slid $1.97, or 3.1 percent, to $62.14 discount retailer Dollar Tree lost $2.19, or 2.3 percent, to $92.24.

The Commerce Department said shoppers spent more money online and at catalog retailers, and Amazon edged higher. Spending at restaurants, clothiers and building materials stores also increased.

SIGNET TARNISHED: Signet Jewelers plunged after the jewelry retailer gave profit and sales forecasts that were weaker than analysts expected. Signet also said it intends to cut at least $200 million in spending and will sell its non-prime credit receivables. It will take a loss of about $170 million on that sale. The stock dropped $9.32, or 19.5 percent, to $38.59.

CHECK ENGINE LIGHT: Tesla declined after Bloomberg News reported that a second senior finance executive resigned. Bloomberg said Treasurer Susan Repo left to become chief financial officer at another company. A week ago the electric car maker said Chief Accounting Officer Eric Branderiz left “for personal reasons.” Separately, CNBC reported that Tesla is having problems manufacturing some parts for its highly anticipated Model 3 sedan.

Tesla stock slipped $16.43, or 4.8 percent, to $325.41.

ENERGY: Benchmark U.S. crude gained 25 cents to $60.96 a barrel in New York. Brent crude, used to price international oils, added 25 cents to $64.89 per barrel in London.

Wholesale gasoline added 4 cents to $1.92 a gallon. Heating oil rose 1 cent to $1.89 a gallon. Natural gas slid 6 cents to $2.73 per 1,000 cubic feet.

METALS: Gold slipped $1.50 to $1,325.60 an ounce. Silver lost 9 cents to $16.54 an ounce. Copper rose 2 cents to $3.16 a pound.

CURRENCIES: The dollar fell to 106.25 yen from 106.61 yen. The euro slipped to $1.2375 from $1.2397.

OVERSEAS: France’s CAC 40 gave up 0.2 percent and the British FTSE 100 lost 0.1 percent. Germany’s DAX added 0.1 percent.

Japan’s benchmark Nikkei 225 lost 0.9 percent while South Korea’s Kospi fell 0.3 percent. Hong Kong’s Hang Seng dropped 0.5 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay .


Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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