Wall Street dips as trade war concerns take center stage
(Reuters) - U.S. stocks fell on Thursday after the United States decided to impose metal import tariffs on Canada, Mexico and the European Union, sparking fresh concerns of a trade war with its top allies.
U.S Commerce Secretary Wilbur Ross told reporters on a telephone briefing that a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from its allies would go into effect at midnight (0400 GMT on Friday).
Shares of Boeing (BA.N) fell 1.1 percent and Caterpillar (CAT.N) declined 1.2 percent. The stocks were among the biggest drag on the Dow Jones Industrials.
Shares of U.S. steel companies Steel Dynamics (STLD.O), AK Steel (AKS.N) and US Steel (X.N) gained between 3.4 percent and 7.4 percent and aluminum producer Alcoa (AA.N) rose 3.4 percent.
Renewed trade worries put an end to market optimism over fresh efforts in Italy to form a government.
Friction between the United States and its trading partners have roiled financial markets, especially after Trump in March decided to impose 25 percent tariff on steel imports and a 10 percent tariff on aluminum.
Adding to the trade worries was a report that President Donald Trump aimed to push German car makers out of the United States altogether, after launching a national security probe last week into car and truck imports.
At 9:50 a.m. EDT the Dow Jones Industrial Average .DJI was down 145.99 points, or 0.59 percent, at 24,521.79, the S&P 500 .SPX was down 8.97 points, or 0.33 percent, at 2,715.04 and the Nasdaq Composite .IXIC was up 5.23 points, or 0.07 percent, at 7,467.68.
Ten of the 11 major index groups were trading lower with the technology stocks the only gainer.
General Motors (GM.N) surged 10.6 percent after Japan’s SoftBank Group (9984.T) decided to invest $2.25 billion in its autonomous vehicle unit.
Data showed that U.S. consumer spending jumped 0.6 percent in April, the biggest gain in five months and above Reuters’ estimate of 0.4 percent rise, in the latest sign that economic growth was regaining momentum early in the second quarter.
Personal consumption expenditures (PCE), the Federal Reserve’s favored measure of inflation which excludes the volatile food and energy components, rose 0.2 percent in April.
That left the year-on-year increase in the so-called core PCE price index at 1.8 percent, below the central bank’s 2 percent target.
Among other stocks, struggling department store operator Sears Holdings (SHLD.O) slid 7.2 percent after its quarterly profit slumped nearly 30 percent.
Dollar General (DG.N) declined about 8 percent and Dollar General (DLTR.O) dropped 11.5percent after both discount retailers missed Wall Street estimates for their quarterly same-store sales.
Declining issues outnumbered advancers for a 1.58-to-1 ratio on the NYSE and by a 1.22-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and 3 new lows, while the Nasdaq recorded 75 new highs and 13 new lows.
Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur