Global stocks took small losses Monday after China reportedly pulled out of trade talks with the U.S. Industrial companies and banks suffered some of the worst declines among American stocks.
The U.S. and China officially began taxing larger amounts of each other’s goods Monday, and the Wall Street Journal reported that China pulled out of talks that could have led to a new round of negotiations to end the trade war.
The U.S. is now taxing another $200 billion in Chinese imports at a rate of 10 percent, and China added taxes of 5 to 10 percent on $60 billion in U.S. products. Among industrial companies, which are considered especially vulnerable to tariffs, General Electric dropped 3.5 percent, while 3M declined 1.3 percent.
Gains in other sectors helped offset some of the trade-related selling, leaving U.S. indexes only slightly lower.
Oil prices jumped after OPEC decided not to produce more oil and gave a boost to shares of oil majors such as Exxon and Chevron. Technology and health care companies also rose.
The U.S.-China trade dispute contributed to some volatile trading sessions earlier this year. Lately, investors have taken things in stride. The S&P 500 hasn’t risen or fallen 1 percent in a day since late June.
“The market’s been remarkably resilient over the last couple of months while trade tensions were heating up,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
Sandven said the trade spat will endure past the midterm elections in November, but stocks are likely to keep rising because of strong earnings growth for U.S. companies, combined with low inflation and low interest rates.
The S&P 500 index fell 10.30 points, or 0.4 percent, to 2,919.37. The Dow Jones Industrial Average lost 181.45 points, or 0.7 percent, to 26,562.05. Both the S&P 500 and Dow set record highs last week.
The Russell 2000 index of smaller-company stocks dropped 7 points, or 0.4 percent, to 1,705.32. The Nasdaq composite rose 6.29 points, or 0.1 percent, to 7,993.25.
Sandven noted that this year’s stock gains have been concentrated in technology, retail and health care companies. That was the case Monday, as Apple gained 1.4 percent to $220.79 and drug and infant formula maker Abbott Laboratories advanced 3.5 percent to $71.44.
U.S. investors were occupied with other news. OPEC and key allies like Russia decided not to increase their oil output further. Production is falling in some OPEC nations, including Iran, which faces new sanctions from the U.S.
Benchmark U.S. crude gained 1.8 percent to $72.08 a barrel in New York while Brent crude, the international standard for oil prices, rose 3 percent to $81.20 a barrel in London, its highest price in more than three years.
Airlines and other transportation companies fell as investors anticipated they will have to pay higher prices for fuel.
Investors also weighed a bout of deal-making.
Late Friday Comcast won an auction for majority control of British satellite TV giant Sky, topping an offer from Twenty-First Century Fox. In London, Sky shares jumped 8.6 percent. Comcast sank 6 percent to $35.63, while Fox rose 1.5 percent to $45.01.
Disney, which is buying Fox, climbed 2.1 percent to $112.77.
Barrick Gold will buy competitor Randgold Resources for $6.1 billion in stock. The merged company will combine Randgold’s African mines with Barrick’s holdings in the Americas to form the world’s largest gold miner.
Barrick rose 5.4 percent to $11.04 and Randgold gained 6.6 percent to $68.14.
Subscription radio company Sirius XM said it’s buying music streaming service Pandora Media. The deal will expand Sirius’ service beyond cars and into homes and other areas. The companies valued the deal at about $3.5 billion in stock.
Sirius sank 10.3 percent to $6.26 and Pandora slid 1.2 percent to $8.98.
An Italian newspaper reported that the Versace group is on the verge of announcing that it will be acquired, and Bloomberg and Reuters reported that luxury fashion and handbag maker Michael Kors is the buyer. The Italian publication, Corriere della Sera, said the deal is worth 2 billion euros ($2.4 billion).
Michael Kors stock skidded 8.2 percent to $66.71.
Markets in Europe edged lower while Asian indexes took sharper losses. Germany’s DAX fell 0.6 percent and the CAC 40 in France lost 0.3 percent. The FTSE 100 in Britain dipped 0.4 percent. Hong Kong’s Hang Seng index fell 1.6 percent and India’s Sensex gave up 1.5 percent. Markets in Japan and South Korea were closed for national holidays.
Marijuana-related companies again made dramatic moves. Biotechnology company Intrexon soared 31.5 percent to $19.07 in heavy trading after it said it engineered a strain of yeast to produce chemical compounds found in marijuana consistently and at low cost. Scientists say that’s been a problem in researching the drug.
Canadian medical marijuana company Tilray sank 19.1 percent to $99.50, its third consecutive big loss. Before that, the stock’s value nearly tripled over the course of a week and a half.
Bond prices fell. The yield on the 10-year Treasury note rose to 3.08 percent from 3.06 percent.
In other commodities trading, wholesale gasoline rose 1.9 percent to $2.05 a gallon. Heating oil added 2.7 percent to $2.29 a gallon. Natural gas gained 2 percent to $3.04 per 1,000 cubic feet.
Gold added 0.3 percent to $1,204.40 an ounce. Silver lost 0.1 percent to $14.34 an ounce. Copper fell 0.8 percent to $2.84 a pound.
The dollar rose to 112.73 yen from 112.52 yen. The euro edged up to $1.1758 from $1.1747.
Source: The Associated Press