U.S. stocks slide in early trade amid U.S.-China trade worries

Alex Veiga, The Associated Press</span>
Published Monday, July 2, 2018 6:40AM EDT
Last Updated Monday, July 2, 2018 11:04AM EDT

U.S. stocks slid in early trading Monday, weighed down by concerns over escalating global trade tensions, weak economic data from Asia and an election result in Mexico that's likely to complicate talks on renegotiating the NAFTA trade agreement. Health care and consumer-focused companies took some of the biggest losses. Energy stocks also fell following a slide in crude oil prices.

KEEPING SCORE: The S&P 500 index fell 8 points, or 0.3 per cent, to 2,709 as of 10:05 a.m. Eastern Time. The Dow Jones industrial average slid 127 points, or 0.5 per cent, to 24,144. The Nasdaq lost 19 points, or 0.3 per cent, to 7,491. The Russell 2000 index of smaller-company stocks gave up 10 points, or 0.7 per cent, to 1,632.

TRADE JITTERS: Investors continued to focus on escalating global trade tensions. The European Union warned the Trump administration Monday that it might slap tariffs on $300 billion of U.S. exports in retaliation for Trump's threatened tariffs on European cars. On Sunday, Canada started imposing tariffs on billions of dollars of U.S. goods in response to the Trump administration's duties on Canadian steel and aluminum. Meanwhile, the U.S. is set to impose a 25 per cent tariff on up to $50 billion of Chinese products starting this Friday. In response, China has said it will raise import duties on $34 billion worth of American goods.

ENERGY: Trump claimed over the weekend that Saudi Arabia will raise oil production by "maybe up to 2,000,000 barrels" in response to turmoil in Iran and Venezuela. This is higher than the 1 million barrels-a-day increase that OPEC countries have agreed on, sending oil futures on a decline. Benchmark U.S. crude fell 23 cents to $73.92 a barrel in New York. Brent crude, used to price international oils, declined 79 cents, or 1 per cent, to $78.44 in London.

The decline in oil prices weighed on energy stocks. Cimarex Energy lost 3 per cent to $98.66.

ON TRACK: Tesla climbed 5.2 per cent to $360.74 after the electric car maker said it has hit its production target for its Model 3.

GOING PUBLIC, AGAIN: Tracking shares in computer maker Dell gained 8.8 per cent to $92.01 after it announced it would go public again after five years as a private company.

DISCOURAGING DATA: China's manufacturing activity slowed in June, adding to concerns that the economy is cooling due to tighter government controls on lending. Meanwhile, the Bank of Japan's "tankan" survey measuring confidence among large-scale manufacturers was at 21 points, down 3 from the March survey, which was the first decline in two years.

MEXICAN ELECTION: Voters in Mexico delivered a tidal wave presidential election victory to leftist Andres Manuel Lopez Obrador, giving him a broad mandate to upend the political establishment and govern for the poor. The widely expected result could complicate the Trump administration's bid to negotiate a trade agreement with Mexico.

BOND YIELDS: Bond prices rose. The yield on the 10-year Treasury fell to 2.84 per cent from 2.86 per cent late Friday.

CURRENCIES: The dollar rose to 110.89 yen from 110.88 yen on Friday. The euro weakened to $1.1603 from $1.1669.

MARKETS OVERSEAS: Germany's DAX fell 0.3 per cent, while France's CAC 40 lost 0.7 per cent. Britain's FTSE 100 gave up 0.8 per cent. Markets in Asia were overshadowed by weaker than expected Chinese manufacturing data and a softening in Japan's economic outlook. Japan's benchmark Nikkei 225 index plunged 2.2 per cent and South Korea's Kospi tumbled 2.4 per cent. Australia's S&P/ASX 200 lost 0.3 per cent. Taiwan's benchmark fell but Southeast Asian indexes were mixed. Hong Kong's markets were closed for a market holiday.

Let's block ads! (Why?)