By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica
Dow turns negative for 2018
U.S. stocks fell broadly on Tuesday, with the Dow turning
negative for 2018 and threatening its longest streak of negative
sessions in more than a year after President Donald Trump
threatened to slap up to $400 billion more in tariffs on China
goods, the latest escalation in a trade dispute that has been
unsettling investors for months.
What did the main benchmarks do?
The Dow Jones Industrial Average fell 1.3%, or 312 points, to
24,676. With the day's decline, the blue-chip average is now down
about 0.2% thus far this year. It is also set for its sixth
straight daily drop, its longest such streak since March 2017.
The Dow appeared to find support at its 50-day moving average, a
closely watched gauge for an asset's short-term price momentum.
Should it hold above that level--which is currently 24,646.79--that
could signal that the benchmark has some buying support at that
level.
Read:The result of all the volatility in 2018's stock market:
Nothing
(http://www.marketwatch.com/story/this-is-the-line-in-the-sand-that-stocks-have-had-the-most-difficult-breaking-through-this-year-2018-05-11)
The S&P 500 fell 21 points, or 0.8%, to 2,753. The Nasdaq
Composite Index shed 60 points to 7,687, a drop of 0.8%.
The day's losses were widespread, with eight of the 11 primary
S&P 500 sectors down on the day. As has recently been the case
(http://www.marketwatch.com/story/these-stocks-are-on-the-rise-as-trade-tensions-force-investors-to-play-defense-2018-06-15)
in "risk off" sessions, the only groups in positive territory were
utilities, telecommunications, and real estate, all of which are
seen as defensive groups.
Don't miss:Should investors favor cyclical or defensive stocks
for the rest of the year? Analysts disagree
(http://www.marketwatch.com/story/should-investors-favor-cyclical-or-defensive-stocks-for-the-rest-of-the-year-analysts-disagree-2018-06-18)
What's driving markets?
After Beijing's retaliation
(https://www.wsj.com/articles/white-house-announces-tariffs-on-50-billion-of-goods-from-china-1529065534?mod=mktw)
against U.S. planned tariffs on $50 billion worth of Chinese
imports,
(http://www.marketwatch.com/story/trump-announces-china-tariffs-says-us-will-pursue-more-if-china-retaliates-2018-06-15)
Trump asked U.S. trade representative Robert Lighthizer late Monday
to identify $200 billion more in Chinese products
(http://www.marketwatch.com/story/trump-seeks-additional-200-billion-in-tariffs-against-china-and-threatens-even-more-2018-06-18)
that could be subject to tariffs of 10%. The U.S. president also
threatened to find $200 billion more worth of goods if China tried
to retaliate against those additional tariffs.
A spokesperson from China's Ministry of Commerce said China will
have no choice but to take comprehensive measures
(http://www.marketwatch.com/story/china-threatens-further-tariffs-on-us-products-as-trade-conflict-escalates-2018-06-19)
in response to the U.S.'s trade moves, the state-run Xinhua News
Agency reported.
Investors have for months been concerned that rising trade
tensions could evolve into a sizable headwind for global growth
going forward, particularly at a time when U.S. gross domestic
product is expected to decelerate--but remain positive--over the
coming years.
Read more:Escalating U.S.-China trade spat comes at a bad time
for global growth, economist says
(http://www.marketwatch.com/story/escalating-us-china-trade-spat-comes-at-a-bad-time-for-global-growth-economist-says-2018-06-15)
Asia had a brutal session, with Chinese shares suffering their
worst close in two years. Suppliers to Apple Inc. (AAPL) took hits
after a report on Monday that the company's chief executive, Tim
Cook, had visited the White House last month to warn that imposing
tariffs on Chinese goods could hurt the iPhone maker
(http://www.marketwatch.com/story/trump-reportedly-told-apple-that-tariffs-against-china-would-spare-iphones-2018-06-18).
Apple fell 1.4%.
Adding yet another layer to trade tensions, the Senate passed
legislation on Monday to reinstate a ban on sales of U.S.
components to ZTE Group
(http://www.marketwatch.com/story/senate-rejects-trump-deal-reinstates-ban-against-zte-2018-06-18),
despite efforts by Trump to spare the Chinese telecommunications
company.
Meanwhile, North Korean leader Kim Jong Un is expected to arrive
in China Tuesday
(http://www.marketwatch.com/story/kim-jong-un-heads-to-china-fresh-off-summit-with-trump-2018-06-18)
for a two-day trip, just days after his summit with Trump.
Following through on a promise made at that meeting, the Pentagon
said it has agreed with South Korea to cancel an important joint
military exercise
(http://www.marketwatch.com/story/us-south-korea-cancel-major-military-exercise-scheduled-for-august-2018-06-18)
that was scheduled for August.
What are strategists saying?
"This is moving beyond 'tit for tat' levels, and predictably,
investors are running for cover under the haven umbrellas, as
global equity indexes are crumbling under the weight of an
escalating trade war," said Stephen Innes, senior trader at Oanda,
in a note to clients.
"It is amazing how quickly the tides can shift, as only hours
ago the market seemed to be backing off the worst of trade war
concerns, and to shift into a full panic mode," said Innes.
It is "the clearest sign yet that these tit-for-tat measures
will continue to escalate until there are some serious economic
consequences on the individual countries and to global sentiment,"
said Jasper Lawler, head of research at London Capital Group, in a
note to clients, referring to the latest U.S. threats.
Which stocks are in focus?
Technology shares were weaker in premarket trading, weighing on
the Nasdaq.Facebook Inc. (FB) fell 1% and Microsoft Corp. (MSFT)
stocks fell 0.7%.
Snap Inc.(SNAP) shares lost 5% after an analyst lowered his
revenue estimate
(http://www.marketwatch.com/story/snap-stock-falls-after-cowen-cuts-estimates-on-daily-active-user-ad-revenue-concerns-2018-06-19)
for the company in the current quarter and in the years ahead,
seeing a slightly lower daily-active-user count and average ad
revenue per user.
Tesla Inc. (TSLA) shares fell 0.7%. Chief Executive Officer Elon
Musk claimed that an employee attempted to sabotage the car maker
in an email sent to employees Sunday night, according to a report
from CNBC
(http://www.marketwatch.com/story/elon-musk-claims-tesla-employee-attempted-sabotage-report-2018-06-18).
Cotiviti Holdings Inc.'s (COTV) stock jumped 11% after Verscend
Technologies Inc., a portfolio company of private-equity firm
Veritas Capital, agreed to buy the company for $4.9 billion
(http://www.marketwatch.com/story/veritas-backed-verscend-to-acquire-health-care-payments-company-cotiviti-for-49-billion-in-cash-2018-06-19).
Foundation Medicine Inc.(FMI) shares surged 28% after Swiss
health care group Roche Holding AG (ROG.EB) announced a $2.4
billion deal
(http://www.marketwatch.com/story/roche-to-buy-rest-of-foundation-medicine-for-24b-2018-06-19)
to buy the remaining shares of the genomic profiling group that it
doesn't already own.
Blue Apron Holdings Inc. (APRN) shares fell 2%. The company
named a new chief supply chain officer
(http://www.marketwatch.com/story/blue-apron-names-new-chief-supply-chain-officer-2018-06-19).
Micron Technology Inc. (MU) fell 0.6% a day before it reports
its quarterly results
(http://www.marketwatch.com/story/micron-earnings-china-probe-poses-wild-card-for-highflying-stock-2018-06-15).
Which economic reports are in focus?
Housing starts data for May surged to an 11-year high
(http://www.marketwatch.com/story/housing-starts-roar-to-an-11-year-high-in-may-2018-06-19),
coming in modestly above expectations.
Check out:MarketWatch's Economic Calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
What are other markets doing?
European stocks fell sharply
(http://www.marketwatch.com/story/european-stocks-slide-as-us-china-trade-tensions-escalate-2018-06-19)
across the board on those trade tensions. In Asia, the Shanghai
Composite closed down 3.8%
(http://www.marketwatch.com/story/asian-markets-sink-led-by-apple-suppliers-on-trumps-latest-tariff-threat-2018-06-18),
with companies such as iPhone camera maker Cowell e Holdings
(1415.HK) slumping nearly 12%. The Nikkei 225 index slid 1.8% as
investors sought the perceived safety of the Japanese yen , which
surged 0.7% against the dollar to Yen109.81.
The ICE U.S. Dollar Index was up 0.3% to 95.093, with gains
stemming from a sharp loss for the British pound , which broke
below $1.32.
Read:In Germany, Merkel wins 2-week reprieve over migrant crisis
(http://www.marketwatch.com/story/in-germany-merkel-wins-2-week-reprieve-over-migrant-crisis-2018-06-18)
(http://www.marketwatch.com/story/european-stocks-slump-as-merkel-comes-under-pressure-in-germany-2018-06-18)Gold
futures rose 0.2% to $1,282.00 an ounce, and the U.S. oil benchmark
fell 1.3% to $65.02 a barrel.
(END) Dow Jones Newswires
June 19, 2018 09:50 ET (13:50 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.