U.S. stocks sank in a broad sell-off on Monday, with the
S&P 500 dropping more than 1.5 percent and technology firms bearing the
brunt of an escalating trade dispute between the United States and other
The U.S. Treasury Department was drafting curbs that would
block firms with at least 25 percent Chinese ownership from buying U.S.
technology firms, a government official said on Sunday. A Wall Street Journal
report also said the U.S. planned to block additional technology exports to
U.S. Treasury Secretary Steven Mnuchin said the
restrictions will not be specific to China but would apply “to all countries
that are trying to steal our technology”.
“Investors are now beginning to worry that this heated
rhetoric is something that will last for a while and could actually lead to disruption
of trade,” said Sam Stovall, chief investment strategist at CFRA Research in
“They want to stick with equities, but rather hide out from
areas most likely to be adversely affected by a pick up in trade tensions.”
The S&P technology index dropped 2.8 percent, set for
their biggest-one day plunge in three months. The Philadelphia Semiconductor
index dropped 3.8 percent, with chipmakers taking a hit as they depend on China
for a large part of their revenue.
The so-called FANG stocks — Facebook, Amazon, Netflix and
Alphabet — tumbled between 3.2 percent and 6.6 percent, with investors taking
profits after the four stocks hit record highs last week.
Harley-Davidson tumbled 5.8 percent after it forecast
additional costs due to higher European Union tariffs on motorbikes imported
from the United States.
At 12:55 p.m. ET, the Dow Jones Industrial Average was down
363.41 points, or 1.48 percent, at 24,217.48, the S&P 500 was down 42.17
points, or 1.53 percent, at 2,712.71 and the Nasdaq Composite was down 187.48
points, or 2.44 percent, at 7,505.34.
The CBOE Volatility index, known as Wall Street’s fear
gauge, spiked to 17.92, highest in two months.
Brent crude prices fell as traders factored in an expected
output increase agreed at the OPEC meet on Friday. The S&P energy index was
down 2.1 percent.
Campbell Soup was the biggest percentage gainer on the
S&P 500, rising 10 percent after a New York Post report that Kraft Heinz
was considering buying the company.
Declining issues outnumbered advancers for a 3.84-to-1
ratio on the NYSE and for a 3.94-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and 17
new lows, while the Nasdaq recorded 45 new highs and 53 new lows.
here for the original article from Reuters.