Stocks Sink on Reports U.S. May Limit Tech Exports, Investment

NEW YORK (AP) -
stocks
(AP Photo/Richard Drew)

U.S. stocks are falling Monday following losses in Europe and Asia, and technology companies are skidding after reports the Trump administration plans to limit high-tech exports to China as well as investment by Chinese firms in technology companies. Treasury Secretary Steven Mnuchin said the investment restrictions might apply to other countries as well. Harley-Davidson is falling after it said it will shift the production of some motorcycles to Europe in response to taxes the EU put on U.S. exports. The benchmark S&P 500 index is on pace for its worst loss since early April.

KEEPING SCORE: The S&P 500 index shed 44 points, or 1.6 percent, to 2,710 as of 1:30 p.m. Eastern time. The Dow Jones Industrial Average fell 375 points, or 1.5 percent, to 24,229. The Nasdaq composite fell 188 points, or 2.5 percent, to 7,504. The Russell 2000 index of smaller-company stocks slid 27 points, or 1.6 percent, to 1,658.

U.S.-CHINA TENSIONS: The Wall Street Journal and Bloomberg News said the Trump administration will limit technology exports to China as well as investment by China. China is attempting to become a global leader in biotechnology, electric vehicles and other industries, and the report said the administration wants to slow Beijing’s progress in those areas. President Donald Trump has threatened to put tariffs on hundreds of billions of dollars in Chinese imports over complaints Beijing steals or pressures foreign companies to hand over technology. He’s also pressuring China to buy more U.S.-made goods.

The U.S. and China are scheduled to impose mutual tariffs on tens of billions’ worth of goods July 6, and the reports suggest the two sides aren’t getting closer to a deal.

On Twitter, Treasury Secretary Steven Mnuchin said the investment restrictions would be aimed at “all countries that are trying to steal our technology,” not just China.

Chipmaker Micron Technology, which gets half its revenue from China,fell 6.9 percent to $53.520 and Advanced Micro Devices fell 5.6 percent to $14.91. Nvidia sank 5.6 percent to $236.85. All 72 of the technology companies listed on the S&P 500 were trading lower.

OVERSEAS: Germany’s DAX fell 2.5 percent and London’s FTSE 100 gave up 2.2 percent. France’s CAC 40 shed 1.9 percent. Hong Kong’s Hang Seng lost 1.3 percent. Tokyo’s Nikkei 225 shed 0.8 percent and in South Korea the Kospi was little changed.

HARLEY SHIFTS: Harley-Davidson will move the production of motorcycles headed for Europe from the U.S. to overseas facilities. On Friday the European Union put tariffs on motorcycles from the U.S. as well as other goods like bourbon, peanut butter and orange juice. Those taxes are retaliation for duties the Trump administration imposed on European steel and aluminum.

Harley said in a regulatory filing Monday that EU tariffs on its motorcycles exported from the U.S. jumped between 6 percent and 31 percent, which translates into an extra $2,200 per average motorcycle exported from the U.S. to the EU.

Its stock fell 6.4 percent to $41.39.

ON THE SKIDS: Retailers and other companies focused on consumers fell as investors sold some of the stocks that have done the best this year. Amazon fell 3.6 percent to $1,654.33 and Netflix dropped 6.5 percent to $384.38.

The S&P 500 index of consumer-focused companies has jumped 10.4 percent this year and the technology index is up 9.5 percent. The S&P 500 is up 1.4 percent.

The trade tensions continued to hit industrial companies, which are facing higher costs and the possibility of tariffs that hurt their sales. Boeing skidded 2.7 percent to $329.68 and Caterpillar shed 2.4 percent to $136.52.

DEALS: Broadcaster Gray Television jumped 9.2 percent to $13.98 after it said it will combine with Raycom in a deal the companies valued at $3.6 billion. Campbell Soup rose 9.3 percent to $42.18 after the New York Post said Kraft Heinz is interested in buying the company. Kraft rose 0.2 percent to $63.32.

ADRIFT: Cruise lines dropped after Carnival cut its annual profit forecast. The company cited the rising cost of fuel. Carnival fell 7.2 percent to $58.96 while Royal Caribbean fell 5 percent to $105.96 and Norwegian Cruises sank 6.7 percent to $48.48.

BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.87 percent from 2.89 percent.

ENERGY: Benchmark U.S. crude dipped 0.8 percent to $68.05 per barrel in New York. It climbed 4.6 percent Friday, its biggest one-day gain since late 2016. Brent crude, used to price international oils, dropped 1.5 percent to $74.20 per barrel in London.

OPEC countries agreed to produce more oil Friday, but investors aren’t sure the cartel will produce as much crude oil as it says it will.

CURRENCY: The dollar fell to 109.46 yen from 109.91 yen. The euro rose to $1.1697 from $1.1663.