U.S. stocks are skidding Thursday after President Donald Trump said he is cancelling a planned meeting with North Korean leader Kim Jong Un. Energy companies are falling along with oil prices as investors respond to reports the nations of OPEC may start producing more oil. Car companies including Fiat Chrysler and Toyota are falling as the Trump administration considered tariffs on imported cars and car parts, a move the governments of China, Japan and the European Union condemned.
The S&P 500 index dropped 18 points, or 0.7 per cent, to 2,714 as of 11:10 a.m. Eastern time. The Dow Jones industrial average lost 219 points, or 0.9 per cent, to 24,667. The Nasdaq composite shed 47 points, or 0.7 per cent, to 7,378. The Russell 2000 index of smaller-company stocks slipped 6 points, or 0.4 per cent, to 1,620.
Technology companies took some of the worst losses. Microsoft fell 1.7 per cent to $97 and Intel gave up 1.7 per cent to $54.23. Video game maker Electronic Arts slid 2.7 per cent to $129.95 and Google’s parent company, Alphabet, skidded 1.1 per cent to $1,073.74.
Benchmark U.S. crude lost 1 per cent to $71.14 per barrel in New York. Brent crude, used to price international oils, fell 0.9 per cent to $79.09 a barrel in London.
Various news outlets reported that the nations of the OPEC cartel might start producing more oil in response to reduced exports from Venezuela and Iran. Greater supplies would send prices lower. Energy companies have slipped in recent days as investors anticipated that possibility. On Thursday Exxon Mobil lost 2.3 per cent to $82.06 and Chevron dipped 1.9 per cent to $126.30.
OPEC and a group of other major oil producers cut production last year in response to a steep drop in oil prices. U.S. crude had fallen from more than $100 a barrel in mid-2014 to as little as $26 a barrel in early 2016. On Monday U.S. crude peaked at $72.24 a barrel, its highest price since late 2014.
Canada’s main stock index was trading flat on Thursday as gains for precious metal miners from a rise in gold prices were offset by losses in energy shares due to a drop in oil price.
At 11: 27 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite Index was 29.79 points, or 0.18 per cent, to 16,104.06.
Four of the index’s 11 major sectors were higher, led by the materials sector which added 1 per cent.
Among stocks, shares of Toronto-Dominion Bank rose 0.5 per cent after Canada’s second-biggest lender by market value reported second-quarter earnings that were ahead of market expectations.
Royal Bank of Canada reported second-quarter results, sending shares of Canada’s biggest lender by market value down 1.9 per cent.
U.S. stocks turned lower after the White House announced that the planned meeting between Mr. Trump and Mr. Kim was off. An open letter from Mr. Trump said he was cancelling the June 12 summit because of “tremendous anger and open hostility” in a recent statement by a North Korean official. The two sides agreed in March after Mr. Trump and Mr. Kim traded public insults and threats for months.
U.S. bond prices rose. The yield on the 10-year Treasury note fell to 2.96 per cent from 2.99 per cent, and banks traded lower. Metals prices also increased. Gold gained 1.2 per cent to $1,304.80 an ounce and silver jumped 1.4 per cent to $16.64 an ounce.
The Trump administration could place tariffs on imported vehicles and automotive parts. It plans to conduct an investigation into those imports on national security grounds. The U.S. will decide by June 1 whether to impose tariffs on steel and aluminum imported from Europe on the same grounds. A European Union official said the proposal would violate World Trade Organization rules and Japan and China also criticized the proposal.
Fiat Chrysler lost 2.2 per cent to $21.97 and Tata Motors fell 5.6 per cent to $21.14. Toyota shares fell 1.8 per cent to $132.42. U.S. rivals Ford rose 1.3 per cent to $11.59 and General Motors added 0.9 per cent to $38.19.
Germany’s struggling Deutsche Bank said it is cutting more than 7,000 jobs as it reshapes its stock trading operation and refocuses its global investment banking business on its European base. The bank’s stock fell 5.2 per cent to $12.21.
Best Buy had a stronger first quarter than analysts expected, but Wall Street was disappointed with the retailer’s profit forecasts for the current quarter and for the rest of the year. The stock lost 7 per cent to $70.64. Prescription drug distributor McKesson said difficult market conditions in Europe and Canada hurt its business in its latest quarter and it declined 2.4 per cent to $143.26.
Overseas, Germany’s DAX lost 0.6 per cent and the FTSE 100 in Britain fell 0.4 per cent. The CAC 40 in France shed 0.2 per cent. Japan’s Nikkei 225 index fell 1.1 per cent and the Kospi in South Korea slipped 0.2 per cent.
The Associated Press and Reuters