Dow turns lower as industrial stocks drag
The Dow Jones Industrial Average fell about half a percent on Monday as worries about the impact of President Donald Trump`s decision to impose metal tariffs continued to weigh on industrial stocks including Boeing and Caterpillar.
Shares of the United States` big manufacturers have been under pressure as Trump`s protectionist stance on steel and aluminium imports could increase costs and hamper sales abroad.
The declines for the Dow comes after a near 2 percent gain for Wall Street on Friday after sluggish wage growth data eased concerns the Federal Reserve might raise interest rates swiftly.
"It is a quiet day in terms of news and you still have the tariff fears kind of circling in the markets," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
Trump last week softened his stance on tariffs by exempting Canada and Mexico, but negotiations are ongoing as the European Union and Japan also sought exemptions.
The tech-heavy Nasdaq, however, gained around 0.6 percent, helped in part by what traders read as further signs of official disapproval of Broadcom`s $117 billion bid for U.S. graphics chipmaker Qualcomm.
The U.S. Treasury said in a letter to Singapore-based Broadcom that it had violated its order by not giving sufficient notice to a national security panel about its plans to redomicile in the United States.
"It`s ... the government coming out and saying that it is leaning toward not allowing this merger to go through," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
"This is a real change because under the Republican administration, it is generally thought of as less regulatory and this is the very opposite."
Broadcom gained 3.6 percent while shares in Qualcomm were flat.
Shares of Micron Technology jumped nearly 10 percent after analysts at Nomura raised their target for the stock to $100, $41 above current rates.
Oclaro jumped 27 percent after laser and optical fibre specialist Lumentum Holdings said it would buy the optical components producer for $1.7 billion. Lumentum`s shares rose 5.6 percent.
Last month, Wall Street saw its worst two weeks in two years as fears of higher wages, inflation and interest rates triggered a selloff that dragged the main indexes into correction territory.
The S&P 500 is just 3 percent below record highs hit on Jan. 26 while the Nasdaq is back to a record. By 13:07 p.m. ET, the S&P 500 was up just 0.02 percent at 2,787.14.
Advancing issues outnumbered decliners on the two major exchanges, by a 1.17-to-1 ratio on the NYSE and a 1.40-to-1 ratio on the Nasdaq.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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