Dow drops eighth straight session on trade worry; Amazon slips

Amazon dropped as much as 1.9 per cent after the court ruling, which allows states to force online retailers to collect sales taxes, before paring losses to trade down 1.1 per cent.— Reuters pic
Amazon dropped as much as 1.9 per cent after the court ruling, which allows states to force online retailers to collect sales taxes, before paring losses to trade down 1.1 per cent.— Reuters pic

NEW YORK, June 22 — US stocks fell yesterday, with the Dow slumping for an eighth straight decline as industrials wobbled again on trade war concerns while Amazon and other online retailers weakened after a US Supreme Court ruling on state sales tax collection.

Big US manufacturers and automakers were under pressure after Germany’s Daimler cut its 2018 profit forecast and BMW said it was looking at “strategic options” because of a trade war between the United States and China.

Caterpillar lost 2.52 per cent and Boeing fell 1.5 per cent, with the S&P industrials off 1.19 per cent and on track for their seventh fall in eight sessions.

“It leads to lack of confidence in the (Trump) administration’s ability to push its economic agenda forward,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management in New York.

“If confidence is waning because of immigration and tariffs, those two things are putting pressure on the market.”

The Trump administration on Wednesday reversed an administration policy that separated children and parents who entered the country illegally at the US-Mexico border.

Amazon dropped as much as 1.9 per cent after the court ruling, which allows states to force online retailers to collect sales taxes, before paring losses to trade down 1.1 per cent. Wayfair lost 1.6 per cent, Overstock.com tumbled 7.2 per cent, Etsy declined 1.4 per cent and Ebay dropped 3.2 per cent.

“You have seen the tug of war as far as investors are concerned with the trading ranges since the announcement. It would appear it is still to be determined the absolute level of ramifications,” said Eric Wiegand, senior portfolio manager at US Bank Private Wealth Management in New York.

Intel also weighed heavily on the S&P 500, down 2.4 per cent after Chief Executive Officer Brian Krzanich resigned following a probe that revealed a past consensual relationship with an employee violated company policy.

The Dow Jones Industrial Average fell 196.1 points, or 0.8 per cent, to 24,461.7, the S&P 500 lost 17.56 points, or 0.63 per cent, to 2,749.76 and the Nasdaq Composite dropped 68.56 points, or 0.88 per cent, to 7,712.95.

The Dow index is heavily affected by industrial companies, and trade concerns pushed it into negative territory for the year earlier this week, with the index on pace for its eighth straight decline.

Ford fell 1.35 per cent, General Motors dropped 1.98 per cent and Tesla lost 4.06 per cent. The S&P 500 automobiles and components index slumped 1.79 per cent.

Energy was the worst-performing sector, down 1.93 per cent as oil prices fell ahead of a meeting of the Organisation of the Petroleum Exporting Countries, where producers are expected to boost output.

Earnings were a bright spot, with shares of Darden Restaurants surging 14.79 per cent and grocer Kroger jumping 9.74 per cent after issuing strong quarterly results.

Declining issues outnumbered advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 2.58-to-1 ratio favoured decliners.

The S&P 500 posted 25 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 130 new highs and 40 new lows.

About 6.87 billion shares changed hands on US exchanges, compared with the 7 billion daily average over the last 20 sessions. — Reuters

Related Articles