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Stocks sink after Trump announces plans for steel tariffs

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By STAN CHOE,

AP Business Writer

NEW YORK (AP) U.S. stocks sank sharply in another dizzying day of trading after President Donald Trump promised stiff tariffs on imported steel and aluminum, which investors feared could lead to retaliation by other countries and higher inflation.

The Standard & Poor's 500 index was down 29 points, or 1.1 percent, at 2,684, as of 3:25 p.m. Eastern time. If it stays there, it would be the third straight loss for the index of at least 1 percent, when it had a total of only four during all of last year.

The Dow Jones industrial average dropped 366, or 1.5 percent, to 24,669. It was down as much as 586 earlier. The Nasdaq composite fell 72, or 1 percent, to 7,198.

Indexes had been bouncing between modest gains and losses earlier in the day, until Trump told industry executives that they'll "have protection for the first time in a long while" and that next week he would level penalties of 25 percent on steel imports and 10 percent on aluminum imports.

"I don't know if this will cause a trade war, and obviously that's the fear," said Lamar Villere, portfolio manager at investment manager Villere & Co. "But this is exactly what candidate Trump said he would do: He said he would be very protectionist and America-first."

European Commission President Jean-Claude Juncker says the EU will take retaliatory action if Trump goes ahead with his plan to slap tariffs on steel and aluminum imports.

As a candidate, Trump often campaigned on an "America First" trade policy, but hadn't taken many steps to implement that since he took office.

A big fear for investors has been that increasingly nationalistic governments will throw up barriers that will hurt the global economy and trade, as well as profits for U.S. exporters. The biggest U.S. company by market value, Apple, got 63 percent of its sales last fiscal year from foreign markets.

While shares of steelmakers surged, with U.S. Steel up $2.53, or 5.8 percent, to $46.05, stocks of companies that use lots of steel fell. So did shares of exporters.

Industrial companies in the S&P 500 fell 1.8 percent for one of the sharpest losses among the 11 sectors that make up the index. Heavy equipment maker Caterpillar lost $4.58, or 3 percent, to $150.05 and aerospace giant Boeing gave back $10.99, or 3 percent, to $351.22.

Bond prices rose as stocks fell, which pushed yields lower. The yield on the 10-year Treasury note dipped to 2.81 percent from 2.86 percent late Wednesday.

 

Posted 3/1/2018

 



 

 
 
 

 

 

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