Stocks Fall but Off Lows as Trump Threatens Increased China Tariffs

Stocks fall Monday after President Trump threatens to raise tariffs on Chinese goods.


By the Rob Lenihan

Article From the street.com | Updated May 6, 2019 11:36 AM EDT

Here Are 3 Hot Things to Know About Stocks Right Now

  • Stocks fell Monday but were off earlier lows after President Donald Trump's tweet threatening to raise tariffs on China-made goods as the world's two largest economies struggle to come up with a trade agreement.
  • Kraft Heinz (KHC - Get Report)  rose slightly after the packaged food company announced it would restate its financial results for 2016 and 2017 following an investigation into its accounting practices, but said the changes wouldn't be "material" and would likely amount to less than $210 million.
  • Tyson Foods (TSN - Get Report)   advanced after the worldwide meat company beat Wall Street's second-quarter earnings estimates but warned of a possible spread of African swine fever.

Wall Street Overview

Stocks retreated Monday but were off earlier lows following President Donald Trump's tweets threatening to raise tariffs on China-made goods as the world's two largest economies struggle to come up with a trade agreement.

Trump, who just days earlier had said negotiations were "going very well," said tariffs on $200 billion worth of goods could be imposed by Friday, with levies on a further $325 billion to follow "shortly." 

CNBC reported that China may back out of negotiations this week after Trump's threats, abandoning a six-month truce after Beijing wavered on previously discussed commitments.

The Dow Jones Industrial Average, which had sunk as low as 471 points, was down 182 points, or 0.69%, to 26,322, the S&P 500 tumbled 0.77%, and the Nasdaq, which reached a record closing high on Friday, sank 0.88%. 

Leading the Dow's fall were Nike (NKE - Get Report) , Apple (AAPL - Get Report) and 3M (MMM - Get Report) .

Chevron (CVX - Get Report)  rose 1.6% to $119.16 after Occidental Petroleum (OXY - Get Report) revised its $57 billion offer to buy Anadarko Petroleum (APC - Get Report) to include $59 a share in cash, up from a previous $38 a share. Occidental, which is trying to push aside Chevron in a bidding war, rose nearly 1.4% to $58.73.

 

Alec Young, FTSE Russell's managing director of global markets research, said that "the key question for investors is whether this is simply aggressive posturing in the hopes of securing greater concessions or something that could truly scuttle any brewing trade deal."

"Without a successful U.S.-China trade breakthrough, it's much harder to be constructive on the global macro outlook," Young said. "So, it's no surprise President Trump's weekend tweets threatening to increase tariffs on $200 billion of Chinese imports to 25% on Friday sent futures tumbling. Along those lines, it's also logical that cyclical, global sectors like technology and industrials are leading the declines."

Shares of Tyson Foods (TSN - Get Report)  rose 2.5% to $76.96 after the worldwide meat company beat Wall Street's second-quarter earnings estimates but warned of a possible spread of African swine fever.

Kraft Heinz (KHC - Get Report)  rose slightly to $32.82 after the packaged food company announced it would restate its financial results for 2016 and 2017 following an investigation into its accounting practices, but said the changes wouldn't be "material" and would likely amount to less than $210 million.

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