NEW YORK: US stocks closed lower on Thursday, retreating after four days of records amid a news report that new US tariffs on China are imminent.
Wall Street opened slightly lower, but sank further after Bloomberg reported that President Donald Trump wants to move ahead with steep import taxes on $200 billion in Chinese goods.
The public has until September 6 to comment on the list of goods to be targeted, but several sources told Bloomberg Trump wants to impose the punitive tariffs right after that deadline.
The benchmark Dow Jones Industrial Average dropped 0.5 percent or 138 points to close the day at 25,986.92.
The broader S&P 500 fell 0.4 percent to 2,901.13, while the tech-heavy Nasdaq was down nearly 0.3 percent to 8,088.36.
Optimism about the prospects of seeing successful talks on the North American Free Trade Agreement in Washington had buoyed investors all week, but with a holiday looming on Monday they were taking advantages of the elevated prices to reap profits.
And a renewal of trade tensions with China and prospects for 25 percent tariffs on a total of $250 billion in annual Chinese imports, undercut the positive feeling. Discussions with Chinese officials in Washington last week did little to defuse the situation.
And with traders heading into a long holiday weekend in the United States, volumes are lower so price movements can be more volatile.
“It would not surprise me if we see some sellers until tomorrow; only because we have seen such an incredible run, people just want to take profit before the holiday week-end,” said JJ Kinahan of TD Ameritrade.
Art Hogan of B Riley FBR said investors were poised for only good news out of the NAFTA talks, so the negative news on China caused a sell off.
Dow members Caterpillar fell two percent, John Deere fell 1.8 percent and Boeing dropped 0.9 percent.
In economic data, a key US inflation measure accelerated slightly to hit the fastest pace in six years at 2.3 percent.
The four-week average for initial claims for jobless benefits fell to the lowest point since 1969, further confirming the basic strength of US employment.
Among the big movers, discount stores Dollar Tree, dropped 15.5 percent, and Dollar General fell one percent, even though both chains turned in better-than-expected earnings reports.
Source: Brecorder
