Markets ended sharply lower on Monday as a fresh round of U.S.-China tariffs came to effect, dampening last week’s hopes of talks between the two counties. Moreover, investors were also closely watching the Fed’s two-day monetary policy meeting, which ends Wednesday and is likely to result in another interest-rate hike. Also, news emerged that U.S. Deputy Attorney General Rod Rosenstein was about to quit. This made investors jittery, leading to a huge selloff. However, the Nasdaq managed to end marginally higher on Monday.
The Dow Jones Industrial Average (DJI) declined 0.7%, to close at 26,562.05. The S&P 500 fell 0.4% to close at 2,919.37. The Nasdaq Composite Index closed at 7,993.25, gaining 0.08%. A total of 6.96 billion shares were traded on Monday, higher than the last 20-session average of 6.65 billion shares. Decliners outnumbered advancers on the NYSE by a 2.03-to-1 ratio. On Nasdaq, a 1.55-to-1 ratio favored declining issues.
How did the Benchmark Perform?
The Dow gave up 181.45 points, after falling nearly 200 points at one point. The Boeing Company (BA - Free Report) and General Electric Company (GE - Free Report) were the biggest sufferers. Shares of Boeing and General Electric shed 1.1% and 3.5%, respectively. Boeing has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Caterpillar, Inc. declined 1.5%. The S&P 500 lost 10.31 points, as industrials and real estate weighed on the index. The Industrial Select Sector SPDR (XLI) and Real Estate Select Sector SPDR (XLRE) declined 1.7% and 2%, respectively. Seven of the 11 major S&P 500 sectors ended in negative territory. The tech heavy Nasdaq added 6.29 points, after pairing initial losses. Shares all Netflix jumped 2.3%.
Trade War Takes a New Turn
Investors have been closely watching the latest developments on trade relations between the United States and its trading partners. On Monday, trade war fears once again escalated as a fresh round of U.S.-China tariffs kicked in. Last week, President Donald Trump had announced that the United States would be imposing 10% tariffs on $200 billion worth of Chinese goods, which would come to effect on Sep 24. China too had retaliated with 10% tariffs on $60 billion worth of U.S. goods.
As the U.S.-China tariffs came to effect on Monday, trade war fears escalated once again. Moreover, reports of China cancelling the scheduled trade talks with the United States made investors jittery. Sectors closely tied to trade issues like industrials and materials were the biggest sufferers.
Political Worries Rattle Markets
On Monday, stocks started declining soon after news that U.S. Deputy Attorney General Rod Rosenstein would resign or be fired started doing the rounds. This dented investors’ confidence once again, leading to a huge sell off. Later, the White House issued a statement that Trump and Rosenstein will meet on Thursday. Rosenstein is overseeing the special counsel’s probe into Russia’s role in the 2016 Presidential election. The announcement from White House somewhat steadied indexes.
Investors have also been closely following the Fed’s two-day monetary policy meeting, which ends Wednesday and is likely to result in another interest-rate hike. Interest-rate sensitive sectors such as consumer staples and real estate were under pressure on Monday, with stocks taking a hit.
Stocks That Made Headlines
FEMSA's Entry in Ecuador to Fortify Drugstore Business
Fomento Económico Mexicano, S.A.B de C.V. (FMX - Free Report) , alias FEMSA, is ready to include another chapter to expand the drugstore business. (Read More).
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