Stocks Slip as Trump Says North Korean Meeting Is Canceled

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(AP Photo/Mark Lennihan, File)

U.S. stocks pared some of an early loss but were still lower in afternoon trading Thursday, after President Donald Trump said he is canceling a meeting with North Korean leader Kim Jong Un.

Energy companies are falling along with oil prices, as investors respond to reports that the nations of OPEC may start producing more oil. Car companies including Fiat Chrysler and Toyota are falling, as the Trump administration considered tariffs on imported cars and car parts, a move the governments of China, Japan and the European Union condemned.

KEEPING SCORE: The S&P 500 index dropped 7 points, or 0.3 percent, to 2,726 as of 3 p.m. Eastern time. The Dow Jones Industrial Average lost 95 points, or 0.4 percent, to 24,791, after it fell 280 points earlier. The Nasdaq composite was unchanged at 7,421 and the Russell 2000 index of smaller-company stocks was unchanged at 1,627.

ENERGY: Benchmark U.S. crude lost 1.6 percent to $70.71 per barrel in New York. Brent crude, used to price international oils, fell 1.3 percent to $78.79 a barrel in London.

Various news outlets reported that the nations of the OPEC cartel might start producing more oil in response to reduced exports from Venezuela and Iran. Greater supplies would send prices lower. Energy companies have slipped in recent days as investors anticipated that possibility. On Thursday Exxon Mobil lost 2.3 percent to $80.22 and Chevron dipped 1.6 percent to $126.58.

OPEC and a group of other major oil producers cut production last year, in response to a steep drop in oil prices. U.S. crude had fallen from more than $100 a barrel in mid-2014 to as little as $26 a barrel in early 2016. On Monday, U.S. crude peaked at $72.24 a barrel, its highest price since late 2014.

NORTH KOREA: Stocks turned lower in the morning after the White House announced that the planned meeting between Trump and Kim was off. An open letter from Trump said he was canceling the June 12 summit because of “tremendous anger and open hostility” in a recent statement by a North Korean official. He later added that the meeting could still happen in June or later.

The two sides agreed in March, after Trump and Kim traded public insults and threats for months.

THE QUOTE: Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said investors were troubled at first by Trump and Kim’s statements about a possible nuclear war, but they’ve gotten used to it, which means the market doesn’t react as much to their statements.

“The first time the market hears these threats there’s a large reaction; and after that there’s less reaction,” he said. “To the extent that it’s just rhetoric right now and there’s no actual military conflict, these moves are kind of short-lived.”

Still, defense companies fared better than the rest of the market. Raytheon rose 1.2 percent to $213.68 and Northrop Grumman gained 1 percent to $331.39.

BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.97 percent from 2.99 percent, and banks traded lower. Metals prices also increased, as the dollar weakened. Gold gained 1.1 percent to $1,304.40 an ounce, and silver jumped 1.7 percent to $16.69 an ounce. Copper picked up 0.8 percent to $3.10 a pound.

BREAKING NEWS: The Trump administration could place tariffs on imported vehicles and automotive parts. It plans to investigate those imports on national security grounds. The U.S. will decide by June 1 whether to impose tariffs on steel and aluminum imported from Europe, on the same grounds. A European Union official said the proposal would violate World Trade Organization rules; and Japan and China also criticized the proposal.

Fiat Chrysler lost 1.5 percent to $22.14, and Tata Motors fell 5.8 percent to $21.09. Toyota shares fell 1.7 percent to $132. 65. U.S. rivals Ford rose 1.5 percent to $11.61, and General Motors added 1.3 percent to $38.36.

“I’m hoping that what they’re doing is trying to put a little pressure on the NAFTA negotiations; and this will be a way to get Mexico and Canada to agree,” said Zaccarelli.

EARNINGS: Best Buy had a stronger first quarter than analysts expected, but Wall Street was disappointed with the retailer’s profit forecasts for the current quarter and for the rest of the year. The stock lost 6.9 percent to $70.69. Prescription drug distributor McKesson said difficult market conditions in Europe and Canada hurt its business in its latest quarter; and it declined 1.9 percent to $144.05.

Home furnishings company Williams-Sonoma surged after raising its annual forecasts following a strong first quarter. It gained 6.9 percent to $52.55.

OTHER ENERGY TRADING: Wholesale gasoline fell 1.2 percent to $2.23 a gallon and heating oil lost 1 percent to $2.27 a gallon. Natural gas rose 0.9 percent to $2.94 per 1,000 cubic feet.

CURRENCIES: The dollar fell to 109.31 yen from 110.07 yen. The euro rose to $1.1727 from $1.1698.

OVERSEAS: Germany’s DAX lost 0.9 percent, and the FTSE 100 in Britain fell 0.9 percent as well. The CAC 40 in France shed 0.3 percent. Japan’s Nikkei 225 index fell 1.1 percent and the Kospi in South Korea slipped 0.2 percent. In Hong Kong, the Hang Seng gained 0.3 percent.