NEW YORK (AP) — Car makers and technology and industrial companies fell Thursday as investors focused on the U.S.-China trade dispute, which could reduce company spending and earnings. The Dow Jones Industrial Average slipped for the eighth day in a row.
While investors generally don't expect a trade war between the U.S. and China, they remain sensitive to signs that rising tariffs and trade tensions will hurt the global economy and reduce corporate profits. This week they've received some signs that this is happening. On Thursday German automaker Daimler said the tariffs China plans to put on cars imported from the U.S. will contribute to a small decline in earnings this year.
The previous day, Fed Chairman Jerome Powell said the U.S. central bank has heard about businesses holding off on hiring and spending in response to the trade conflicts. Kate Moore, global equity strategist for BlackRock, said that investors have been hoping that the Republican-backed corporate tax cut would encourage companies to hire more workers, boost pay, and expand their operations, but the uncertainty over tariffs is discouraging them from doing that.
"There's a fear that rising uncertainty around trade and tariffs is going to significantly affect investment decisions and hiring decisions, and potentially take some steam off of what has looked like a very strong expansion," she said. She added that companies have been reluctant to make major investments since the financial crisis of 2008-09, and some investors felt the tax cuts would help change that pattern.
Online retailers skidded and rivals such as department stores rose after the Supreme Court ruled that states can force more online shoppers to pay sales tax. Energy companies declined ahead of a meeting where OPEC countries and other nations are expected to increase oil production. Bond yields fell, and big dividend payers like real estate investment trusts and utilities made some of the biggest gains on Wall Street.
The S&P 500 index slid 17.56 points, or 0.6 percent, to 2,749.76. The Dow fell 196.10 points, or 0.8 percent, to 24,461.70. The index has fallen 3.4 percent over the last eight days. Its last losing streak this long was in March 2017. The Nasdaq composite lost 68.56 points, or 0.9 percent, to 7,712.95. The Russell 2000 index of smaller-company stocks declined 18.04 points, or 1.1 percent, to 1,688.95. The Nasdaq and Russell 2000 both closed at record highs Wednesday.
Daimler is projecting fewer SUV sales and higher costs for Mercedes-Benz cars as a result of Chinese tariffs on cars made in the U.S. Those are scheduled to take effect July 6. The company now says its earnings before interest and taxes will fall slightly this year rather than the previously forecast small increase. Its stock fell 4.3 percent in Germany.
Online retailers dropped following the Supreme Court ruling. For more than two decades, companies were not required to collect sales tax on online purchases that were made in a state where the company did not have a warehouse, office or other physical presence. States argued that those rules deprived them of billions of dollars in tax revenue, and traditional retailers said online sellers had an unfair advantage.
Overstock.com lost 7.2 percent to $36.15 and home goods site Wayfair gave up 1.6 percent to $114.28 while Amazon lost 1.1 percent to $1,730.22. Target gained 1 percent to $76.14 and Nordstrom added 1.8 percent to $52.78.
Energy companies skidded as investors expect OPEC to agree to a production increase at a meeting on Friday. Greater production reduces oil prices, and that has weighed on energy stocks in recent weeks. Chevron fell 2.2 percent to $122.59 and Marathon Oil dropped 5.4 percent to $19.92.
U.S. crude dropped 0.3 percent to $65.54 a barrel in New York and Brent crude, the international standard for oil prices, lost 2.3 percent to $73.05 a barrel in London.
Intel fell 2.4 percent to $52.19 after its CEO resigned. The world's largest chipmaker said CEO Brian Krzanich is stepping down after the company learned he had a relationship with an employee. Intel said the relationship was consensual, but violated a policy that bars managers from having relationships with employees.
Bond prices climbed. The yield on the 10-year Treasury note fell to 2.90 percent from 2.94 percent. That helped stocks that pay big dividends including utilities and real estate investment trusts.
In other energy trading, wholesale gasoline lost 0.6 percent to $2.01 a gallon. Heating oil fell 1.8 percent to $2.07 a gallon. Natural gas rose 0.4 percent to $2.98 per 1,000 cubic feet.
Gold shed 0.3 percent to $1,270.50 an ounce. Silver edged up 0.1 percent to $16.33 an ounce. Copper slid 0.6 percent to $3.02 a pound.
The dollar fell to 109.90 yen from 110.40 yen. The euro rose to $1.1617 from $1.1587.
The German DAX dropped 1.4 percent after Daimler's warning. France's CAC 40 lost 1 percent and Britain's FTSE 100 gave up 0.9 percent after its central bank indicated it could raise rates this summer.
Japan's benchmark Nikkei 225 index finished up 0.6 percent and the Kospi in South Korea dropped 1 percent. Hong Kong's Hang Seng fell 1.4 percent.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay