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U.S.-China trade worries weigh on stocks

Ten Years Since Financial Crisis Of 2008
The New York Stock Exchange.
(Spencer Platt / Getty Images)

A slide in technology companies helped pull down U.S. stocks Monday, snapping a five-day winning streak for the market.

The selloff came amid speculation that the Trump administration was preparing to impose tariffs on an additional $200 billion worth of Chinese goods. The two governments have already levied 25% tariffs on $50 billion of each other’s exports, and another round of tariffs would represent a significant escalation in the trade dispute between the world’s two largest economies.

Investors used the prospect of a deeper U.S.-China trade conflict to take some profits, especially in technology stocks, the market’s biggest gainers this year. Department stores and other consumer-focused companies also accounted for a big slice of the losses. Traditionally safe-play sectors, such as real estate and utilities, rose. Oil prices fell, erasing early gains.

The Standard & Poor’s 500 index fell 16.18 points, or 0.6%, to 2,888.80. The Dow Jones industrial average fell 92.55 points, or 0.4%, to 26,062.12. The tech-heavy Nasdaq composite slid 114.25 points, or 1.4%, to 7,895.79. The Russell 2000 index of smaller-company stocks fell 18.17 points, or 1.1%, to 1,703.55. Most stocks closed lower on the New York Stock Exchange.

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The United States has been locked in an escalating trade dispute with China, its biggest trading partner. Washington contends that Beijing uses predatory tactics to acquire technology know-how in an effort to overtake American global supremacy in technology.

Over the weekend, news reports indicated that the White House was set to announce tariffs on $200 billion in Chinese imports. Beijing has said it would swiftly retaliate against additional U.S. tariffs.

The uncertainty over the trade dispute has at times roiled the market, but that has not derailed it from notching gains on the strength of strong corporate earnings and a growing U.S. economy. That suggests that many investors expect the two sides will ultimately work out a deal.

“It’s a short-term, immediate-term thorn in the market’s side,” said Ted Theodore, chief investment officer of TrimTabs Asset Management. “A big part of it is not knowing what the game plan is.”

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Technology companies led the market’s slide. Apple fell 2.7% to $217.88. Netflix slumped 3.9% to $350.35. Twitter slid 4.2% to $28.86 after an analyst cut the price target on the stock.

Amazon.com fell 3.2% to $1,908.03 after the Wall Street Journal reported that the online retail giant is investigating suspected bribes of its employees and data leaks by them.

Several big department store chains declined. Macy’s slid 3.1% to $35.16. Kohl’s fell 2% to $79.26. Gap retreated 2.6% to $27.05.

Teva Pharmaceutical climbed 2.5% to $23.43 after the Food and Drug Administration approved the drugmaker’s preventive migraine treatment.

Express Scripts jumped 3.7% to $95.23 after federal regulators cleared the way for Cigna to buy it. Cigna rose 1.4% to $197.84.

Bond prices were little changed. The yield on the 10-year Treasury held at 2.99%.

The dollar fell to 111.18 yen from 112.03 yen. The euro strengthened to $1.1686 from $1.1632.

Oil prices ended down. Benchmark U.S. crude slipped 0.1% to $68.91 a barrel in New York. Brent crude, used to price international oils, slipped 0.1% to $78.05 a barrel in London.

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Wholesale gasoline fell 0.3% to $1.98 a gallon. Heating oil fell 0.1% to $2.21 a gallon. Natural gas jumped 1.7% to $2.81 per 1,000 cubic feet.

Gold rose 0.4% to $1,205.80 an ounce. Silver rose 0.6% to $14.22 an ounce. Copper rose 0.2% to $2.65 a pound.


UPDATES:

2 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 7:35 a.m.


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