The Nasdaq finished at another record high, but the Dow tumbled as revived worries of a trade war led to heavy selling in shares of several leading multinationals
New York (AFP) - The Nasdaq finished at another record high Monday, but the Dow tumbled as revived worries of a trade war led to heavy selling in shares of several leading multinationals.
The tech-rich Nasdaq Composite Index rose 0.4 percent to 7,588.32, its second straight record.
The Dow Jones Industrial Average dropped 0.6 percent to 25,178.61, while the broad-based S&P 500 shed 0.1 percent to 2,783.02.
Wall Street stocks opened well on continued positive momentum from last Friday’s strong jobs report, but the tone quickly shifted as investors took note of sharpening rhetoric on international trade.
European Trade Commissioner Cecilia Malmstroem said the trading bloc would “stand up to bullies” after President Donald Trump threatened to tax German cars if the European Union doesn’t lower barriers to US products.
Trump provoked the Europeans still further in a tweet saying his Commerce Secretary Wilbur Ross would speak with the EU side “about eliminating the large tariffs and barriers they use against the U.S.A.”
Art Hogan, chief market strategist at Wunderlich Securities, said the back and forth reignited worries about a trade war that had receded somewhat after Trump indicated more flexibility on imported steel and aluminum.
“Now, when we start to hear about possible retaliation, it becomes a concern again,” Hogan said.
Boeing and Caterpillar both dropped more than two percent, while United Technologies shed 1.9 percent and Honeywell International 1.3 percent. All are major exporters that could be hurt if escalating threats become reality.
Among Nasdaq companies, both Apple and Amazon gained around one percent, while Tesla Motors jumped 5.6 percent.
But Netflix dropped 3.1 percent after Citron Research said the streaming company was overvalued and should be “shorted,” meaning investors should bet it will fall.
Broadcom shares jumped 3.6 percent after a Wall Street Journal report that Intel is considering bidding for the chip company, which has undertaken a hostile campaign to buy Qualcomm. Intel fell 1.3 percent.
Goldman Sachs gained 1.0 percent after announcing that co-president Harvey Schwartz would retire, leaving David Solomon the sole president and next in line to become the investment bank’s next chief executive.