Dow drops eighth straight session on trade worry; Amazon slips

23 Jun, 2018

US stocks fell on Thursday, 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 percent and Boeing fell 1.5 percent, with the S&P industrials off 1.19 percent 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 percent after the court ruling, which allows states to force online retailers to collect sales taxes, before paring losses to trade down 1.1 percent. Wayfair lost 1.6 percent, Overstock.com tumbled 7.2 percent, Etsy declined 1.4 percent and Ebay dropped 3.2 percent.
"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 percent 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 percent, to 24,461.7, the S&P 500 lost 17.56 points, or 0.63 percent, to 2,749.76 and the Nasdaq Composite dropped 68.56 points, or 0.88 percent, 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 percent, General Motors dropped 1.98 percent and Tesla lost 4.06 percent. The S&P 500 automobiles and components index slumped 1.79 percent.
Energy was the worst-performing sector, down 1.93 percent as oil prices fell ahead of a meeting of the Organization 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 percent and grocer Kroger
jumping 9.74 percent 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.

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