Markets closed slightly lower on Thursday after President Donald Trump scrapped his planned meeting with North Korea’s premier Kim Jong Un. Further, Trump also threatened to impose import duty on cars and trucks that took a toll on the markets. Moreover, the broader energy sector took a hit as investors dumped energy stocks as oil prices declined on news that Opec members could escalate production to ease supply restraint from Iran and Venezuela.
The Dow Jones Industrial Average (DJI) declined 0.3% to close at 24,811.75. The S&P 500 fell 0.2% to close at 2,727.76. The Nasdaq Composite Index closed almost unchanged at 7,424.43, declining less than 0.1%. A total of 6.3 billion shares were traded on Thursday, lower than the last 20-session average of 6.6 billion shares. Decliners outnumbered advancers on the NYSE by a 1.03-to-1 ratio. On Nasdaq, a 1.09-to-1 ratio favored declining issues.
How did the Benchmark Perform?
The Dow lost 75.05 points after hitting a lot of as much as 280.91 points on news of Trump cancelling the Singapore summit. However, the losses were pared by gains in Netflix (NFLX - Free Report) and General Electric (GE - Free Report) .
The S&P 500 lost 5.53 points, with the Energy Select Sector SPDR Fund (XLE) and Financial Estate Select Sector SPDR Fund (XLF) losing 1.7% and 0.8%, respectively. Seven of the 11 major S&P 500 sectors ended the day in negative territory. The tech-heavy Nasdaq made a marginal loss of 1.53 points.
Trump Cancels Meeting with Kim Jong Un
Trump on Thursday cancelled the scheduled June 12 Singapore summit with North Korea’s Kim Jong Un. Trump cited “open hostility” from North Korea as the reason behind the cancellation of the meeting. This would have been the first face-to-face meeting with an U.S. president and a North Korean leader.
The cancellation followed even though North Korea kept its promise to blow up tunnels at its nuclear test site. The news dented investors’ confidence, with stocks taking a hit immediately. However, the initial losses were pared later after shares of Netflix and General Electric rallied. Netflix’s market value jumped to $153 billion, surpassing Walt Disney (DIS - Free Report) for the first time to make it the world’s most valuable entertainment company.
Oil Prices Fall
Investors shunned energy stocks on Thursday, on possibilities of easing oil production caps by Russia and Opec countries sending crude oil prices lower. News of Opec members planning to increase the production of oil in order to ease supply constraints from Venezuela and Iran, saw investors panicking over crude oil prices going down. Both Iran and Venezuela are under threat from U.S. sanctions.
This saw major energy stocks plummeting with Pioneer Natural Resources (PXD - Free Report) and Apache Corporation (APA - Free Report) declining 3.1% each. Shares of Exxon Mobil Corporation (XOM - Free Report) declined 2.3% and Chevron Corporation (CVX - Free Report) sank 1.6%. Chevron has a Zack Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tariff on Auto Imports Escalate Fears
Trump on Wednesday had ordered the Commerce Department to start an investigation into whether car and truck imports threaten national security. Trump is also considering slapping 25% import duty on automobile imports. This dampened the spirits of foreign automakers, which continued to take a toll on shares of foreign automakers on Thursday. This saw shares of major foreign carmakers like Toyota (T - Free Report) and Honda (HMC - Free Report) taking a hit once again on Thursday.
Stocks That Made Headlines
Foot Locker Q1 Earnings & Sales Top Estimates, Stock Up
Foot Locker, Inc. (FL - Free Report) continued with its positive earnings surprise streak for the third straight quarter, when it reported first-quarter fiscal 2018 results. (Read More)
Gap Q1 Earnings Miss Hits Stock, Revenues Top Estimates
Shares of The Gap Inc. (GPS - Free Report) declined in after-hours trading yesterday, following lower-than-expected earnings in first-quarter fiscal 2018. (Read More)
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