Energy Companies Lead U.S. Stocks Lower Amid Trade Worries

(AP) -
Traders at the New York Stock Exchange, Monday. (AP Photo/Richard Drew)

Energy companies led U.S. stocks broadly lower in afternoon trading Monday, adding to the market’s losses from last week. Retailers and other consumer-focused companies also fell, outweighing gains by banks. Investors’ jitters over escalating global trade tensions and weak economic data from Asia weighed on the market.

KEEPING SCORE: The S&P 500 index fell 13 points, or 0.5 percent, to 2,705 as of 1:11 p.m. Eastern Time. The Dow Jones Industrial Average slid 132 points, or 0.5 percent, to 24,139. The Nasdaq sank 18 points, or 0.2 percent, to 7,492. The Russell 2000 index of smaller-company stocks gave up 1 point, or 0.1 percent, to 1,641.

The benchmark S&P 500 index has posted losses the past two weeks. U.S. stock markets will close early at 1 p.m. ET Tuesday ahead of the Independence Day holiday on Wednesday.

THE QUOTE: “You saw some of the more tariff-sensitive stocks a little bit weaker on the opening,” said JJ Kinahan, chief market strategist for TD Ameritrade. “It’s all headline news trading.”

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 President 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 percent 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.

OIL: 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 reversed an early slide, rising 4 cents to $74.19 a barrel in New York. Brent crude, used to price international oils, declined $1.36, or 1.7 percent, to $77.87 in London.

The decline in oil prices weighed on energy stocks. Cimarex Energy fell 3.4 percent to $98.25.

BAD BET: Wynn Resorts sank 8.2 percent to $153.56 after June revenue growth at the casino operator’s resorts in Macau fell well short of Wall Street’s expectations.

DROPPING THE BALL: Nike declined 2.8 percent to $77.44 after the athletic shoe and apparel company lost a major endorsement deal.

BUMPY RIDE: Tesla slid 3.4 percent to $331.46, erasing gains notched earlier when the electric car company’s shares were lifted by news that Tesla hit its weekly production targets on its new Model 3 sedan.

RETAIL SLUMP: Shares in several department store chains declined. Nordstrom fell 2.9 percent to $50.28, while Macy’s slid 3.1 percent to $36.26. Kohl’s gave up 2.7 percent to $70.95.

GOING PUBLIC, AGAIN: Tracking shares in computer maker Dell gained 7.6 percent to $90.97 after it announced it would go public again after five years as a private company. Meanwhile, shares in VMWare jumped 10.8 percent to $162.78 on speculation that Dell may buy the rest of the business software company, which will also issue a special dividend to shareholders.

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 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. Mexico’s Bolsa stock index slid 1.4 percent.

BOND YIELDS: Bond prices were little changed. The yield on the 10-year Treasury held at 2.86 percent.

CURRENCIES: The dollar slipped to 110.82 yen from 110.88 yen on Friday. The euro weakened to $1.1604 from $1.1669.

MARKETS OVERSEAS: Germany’s DAX fell 0.6 percent, while France’s CAC 40 lost 0.9 percent. Britain’s FTSE 100 gave up 1.2 percent. 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 percent and South Korea’s Kospi tumbled 2.4 percent. Australia’s S&P/ASX 200 lost 0.3 percent. Taiwan’s benchmark fell but Southeast Asian indexes were mixed. Hong Kong’s markets were closed for a market holiday.