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US-China tariffs take effect, hit industrials the most

Devdiscourse News Desk
Updated: 24-09-2018 22:58 IST
US-China tariffs take effect, hit industrials the most

U.S. stock indexes dropped on Monday, led by industrials that bore the brunt of the latest round of U.S.-China tariffs and on reports that Deputy Attorney General Rod Rosenstein, who oversees the Mueller investigation, may be on his way out.

With U.S. tariffs on some $200 billion worth of Chinese goods taking effect, along with Beijing's retaliatory duties, nine of the 11 major S&P sectors, including the rebranded and bigger "communications services" sector, fell.

Industrial stocks, which have borne the brunt of the protracted trade war, fell 1.28 percent, while material stocks slid 1.37 percent. Boeing, the biggest U.S. exporter to China, shed 0.8 percent.

The S&P 500 hit a session low after Axios reported Rosenstein, who oversees the special counsel investigation into Russia's role in the 2016 presidential election, had resigned. But other reports said he had not resigned but had been summoned to the White House.

"The Rosenstein stuff is just another negative story that is piling on top of other stories out there today, China obviously being the biggest negative, that is the one that really has the potential to price stocks," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

At 11:48 a.m. ET the Dow Jones Industrial Average was down 164.58 points, or 0.62 percent, at 26,578.92, the S&P 500 was down 11.81 points, or 0.40 percent, at 2,917.86 and the Nasdaq Composite was down 13.89 points, or 0.17 percent, at 7,973.06.

The CBOE Global Markets volatility index, known as Wall Street's "fear gauge", rose 0.93 points, its most in a week, as the S&P 500 sector shuffle took effect.

The communications services index, an expanded version of the old telecoms sector, recovered from a drop at the open in its debut to trade little changed.

Its biggest drag came from Comcast, which slid 7.1 percent after it won an auction for Sky Plc. Comcast outbid a team of Twenty-First Century Fox and Walt Disney, which gained 1.4 percent and 1.3 percent, respectively.

The consumer discretionary sector fell 0.70 percent, led by Michael Kors's 8.8 percent tumble. The fashion group has agreed to take control of Italy's Versace in a deal that could value the company at $2 billion, a source said.

The energy sector rose 1.28 percent, the most among the 11 major sectors, as oil prices jumped after OPEC rebuffed calls by President Donald Trump to raise supply.

Exxon Mobil gained 1.7 percent, the most on the Dow, while Chevron rose 0.7 percent.

Declining issues outnumbered advancers for a 2.10-to-1 ratio on the NYSE and a 1.92-to-1 ratio on the Nasdaq.

The S&P index recorded 15 new 52-week highs and three new lows, while the Nasdaq recorded 32 new highs and 29 new lows.