Stocks continued to fall sharply Thursday as investors reacted to the intensifying trade war between the United States and China.
The Dow Jones Industrial Average, on track for its fifth straight week of declines, fell 359 points, or 1.39%, to 25,417, the S&P 500 fell 1.20%, and the tech-heavy Nasdaq declined 1.45%.
Gao Feng spokesperson for China’s Ministry of Commerce said Thursday that talks between the world’s two largest economies can only resume if the U.S. adjusts “its wrong actions.”
Treasury Secretary Steven Mnuchin told the House Financial Services Committee that there were no scheduled talks with high level officials in Beijing, but added that presidents Donald Trump and Xi Jinping likely would meet at next month’s G-20. He also suggested that a decision for further tariffs on China-made goods won’t be made “for another 30 to 45 days,” which overlaps with the late June summit in Japan.
“Investors are differentiating among sectors, favoring more domestic and defensive areas like real estate, utilities, telecom and consumer goods,” said Alec Young, managing director of global markets research, FTSE Russell. “Conversely, sectors most exposed to global woes and Chinese trade like technology and industrials are bearing the brunt of growing investor unease.”
Young added that “continued weak global economic data and the lack of a specific date for the resumption of U.S.-China trade talks are clouding earnings visibility and weighing on risk appetite.”
“Markets are pricing in the harsh reality that trade tension is more likely to linger than quickly be resolved as had been the consensus expectation anchoring sentiment until late April,” he said.
Apple (AAPL – Get Report) and Tesla (TSLA – Get Report) both slumped as investors grow increasingly concerned that the current U.S.-China trade dispute will ensnare iconic companies in damaging tech cold war. Apple was down 1.6% to $179.82, while Tesla was off 3.1% to $186.68.
Shares of data- and cloud-storage services company NetApp (NTAP – Get Report) sank 10.9% to $59.79 after it reported weaker-than-expected earnings and revenue, and also forecast an upcoming drop in quarterly sales and profit.
In economic news, initial claims for state unemployment benefits dropped 16,000 to a seasonally adjusted 212,000 for the week ended May 11, the Labor Department said.