AP Photo/Richard Drew, File

Market Watch: US stocks skid as industrials, automakers, tech trade lower

June 21, 2018 - 9:58 am
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By MARLEY JAY, AP Markets Writer

NEW YORK (AP) — U.S. stocks are lower Thursday as investors again worry about the potential effects of the U.S.-China trade dispute. German automaker Daimler lowered its annual profit forecast, partly because of higher import taxes on U.S. vehicles in China. Industrial companies are taking more losses. Energy companies are falling along with oil prices and online retailers are skidding after the Supreme Court ruled that states can force online shoppers to pay sales tax.

KEEPING SCORE: The S&P 500 index slid 11 points, or 0.4 percent, to 2,755 as of 1:55 p.m. Eastern time. The Dow Jones industrial average was on track for its eighth loss in a row as it fell 136 points, or 0.6 percent, to 24,521. The index is down about 3 percent over that time. The Nasdaq composite lost 52 points, or 0.7 percent, to 7,729. The Russell 2000 index of smaller-company stocks declined 12 points, or 0.7 percent, to 1,694. The Nasdaq and Russell 2000 both closed at record highs Wednesday.

TRADE TALK: Daimler is projecting fewer SUV sales and higher costs for Mercedes-Benz cars as a result of Chinese tariffs on cars made in the U.S. The company now says its earnings before interest and taxes will fall slightly this year after it had forecast a small increase in earnings. Its stock fell 4.3 percent in Germany.

Other automakers also slipped. GM lost 2.2 percent to $41.01 and Fiat Chrysler sank 5.1 percent to $19.32. Industrial companies were also battered. Boeing lost 1.4 percent to $337.75 and Caterpillar lost 1.8 percent to $140.54. Along with the Dow's losing streak, the industrial index of the S&P 500 is down 4.9 percent over the last month, worse than any other part of the index except for energy companies. The S&P 500 is up 0.9 percent over that time.

Industrial companies are especially vulnerable in the U.S.' ongoing trade dispute with several other countries, as they will have to pay more for the steel and aluminum they use. Other countries might put tariffs on those companies' finished products, which could also hurt sales.

ENERGY: Energy companies skidded as investors expect OPEC to agree to a production increase at a meeting on Friday. Greater production reduces oil prices, and that has been weighing on energy stocks in recent weeks. Chevron fell 1.7 percent to $123.22 and Marathon Oil dropped 4 percent to $20.22.

U.S. crude rose 0.7 percent to $66.16 a barrel in New York and Brent crude, the international standard for oil prices, lost 0.9 percent to $74.03 a barrel in London.

TAXED: Online retailers dropped and large retailers with more stores traded higher following the Supreme Court ruling. Under old rules, some companies did not collect sales tax on online purchases that were made in a state where the business did not have a physical presence, like a warehouse or office. The state of South Dakota sued online retailer Overstock and home goods company Wayfair in its bid to get the rules changed.

Wayfair lost 1 percent to $114.98 and Overstock.com fell 6.8 percent to $36.30. Etsy slipped 2.7 percent to $43.01 while Amazon lost 0.9 percent to $1,734.51. Target gained 1.6 percent to $76.62 and Nordstrom added 1.8 percent to $52.74.

EARNINGS: Kroger climbed 7.9 percent to $28.25 after it posted strong results in the first quarter and made a small increase to its annual profit forecast. Darden Restaurants, the parent of the Olive Garden chain, jumped 13.4 percent to $105.81 after it surpassed Wall Street expectations in its fiscal fourth quarter.

INTEL CEO OUT: The world's largest chipmaker said CEO Brian Krzanich is resigning after the company learned he had a relationship with an employee. Intel said the relationship was consensual, but violated a policy that bars managers from having relationships with employees. Krzanich had been Intel's CEO since 2013 and Chief Financial Officer Robert Swan will be interim CEO while Intel searches for a replacement.

Intel fell 2.3 percent to $52.24.

BONDS: Bond prices climbed. The yield on the 10-year Treasury note fell to 2.91 percent from 2.94 percent. That helped stocks that pay big dividends including utilities and real estate investment trusts.

CURRENCY: The dollar fell to 109.90 yen from 110.40 yen. The euro rose to $1.1617 from $1.1587.

OVERSEAS: The German DAX dropped 1.4 percent after Daimler's warning. France's CAC 40 lost 1 percent and Britain's FTSE 100 gave up 0.9 percent after its central bank indicated it could raise rates this summer.

Japan's benchmark Nikkei 225 index finished up 0.6 percent and the Kospi in South Korea dropped 1 percent. Hong Kong's Hang Seng fell 1.4 percent.

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