North American stocks are falling Monday following losses in Europe and Asia, and technology companies are skidding after reports the Trump administration plans to limit high-tech exports to China as well as investment by Chinese firms in technology companies.
Treasury Secretary Steven Mnuchin said the investment restrictions might apply to other countries as well. Harley-Davidson is falling after it said it will shift the production of some motorcycles to Europe in response to taxes the EU put on U.S. exports. The benchmark S&P 500 index is on pace for its worst loss since early April.
At 1:47 a.m. ET, the S&P/TSX composite index was down 206.98 points, or 1.26 per cent, at 16,243.21 in Toronto. Only utility stocks were trading in positive territory.
In New York, the S&P 500 index shed 44 points, or 1.6 per cent, to 2,710 as of 1:30 p.m. Eastern time. The Dow Jones Industrial Average lost 375 points, or 1.5 per cent, to 24,229. The Nasdaq composite fell 188 points, or 2.5 per cent, to 7,504. The Russell 2000 index of smaller-company stocks slid 27 points, or 1.6 per cent, to 1,658.
The Wall Street Journal and Bloomberg News said the Trump administration will limit technology exports to China as well as investment by China. China is attempting to become a global leader in biotechnology, electric vehicles and other industries, and the report said the administration wants to slow Beijing’s progress in those areas. President Donald Trump has threatened to put tariffs on hundreds of billions of dollars in Chinese imports over complaints Beijing steals or pressures foreign companies to hand over technology. He’s also pressuring China to buy more U.S.-made goods.
The U.S. and China are scheduled to impose mutual tariffs on tens of billions’ worth of goods July 6, and the reports suggest the two sides aren’t getting closer to a deal.
On Twitter, Treasury Secretary Steven Mnuchin said the investment restrictions would be aimed at “all countries that are trying to steal our technology,” not just China.
Chipmaker Micron Technology, which gets half its revenue from China, lost 6.9 per cent to $53.520 and Advanced Micro Devices fell 5.6 per cent to $14.91. Nvidia sank 5.6 per cent to $236.85. All 72 of the technology companies listed on the S&P 500 were trading lower.
Germany’s DAX fell 2.5 per cent and London’s FTSE 100 gave up 2.2 per cent. France’s CAC 40 shed 1.9 per cent. Hong Kong’s Hang Seng lost 1.3 per cent. Tokyo’s Nikkei 225 shed 0.8 per cent and in South Korea the Kospi was little changed.
Harley-Davidson will move the production of motorcycles headed for Europe from the U.S. to overseas facilities. On Friday the European Union put tariffs on motorcycles from the U.S. as well as other goods like bourbon, peanut butter and orange juice. Those taxes are retaliation for duties the Trump administration imposed on European steel and aluminum.
Harley said in a regulatory filing Monday that EU tariffs on its motorcycles exported from the U.S. jumped between 6 per cent and 31 per cent, which translates into an extra $2,200 per average motorcycle exported from the U.S. to the EU.
Its stock fell 6.4 per cent to $41.39.
Retailers and other companies focused on consumers fell as investors sold some of the stocks that have done the best this year. Amazon lost 3.6 per cent to $1,654.33 and Netflix dropped 6.5 per cent to $384.38.
The S&P 500 index of consumer-focused companies has jumped 10.4 per cent this year and the technology index is up 9.5 per cent. The S&P 500 is up 1.4 per cent.
The trade tensions continued to hit industrial companies, which are facing higher costs and the possibility of tariffs that hurt their sales. Boeing skidded 2.7 per cent to $329.68 and Caterpillar shed 2.4 per cent to $136.52.
Cruise lines dropped after Carnival cut its annual profit forecast. The company cited the rising cost of fuel. Carnival fell 7.2 per cent to $58.96 while Royal Caribbean gave up 5 per cent to $105.96 and Norwegian Cruises lost 6.7 per cent to $48.48.
Benchmark U.S. crude dipped 0.8 per cent to $68.05 per barrel in New York. It climbed 4.6 per cent Friday, its biggest one-day gain since late 2016. Brent crude, used to price international oils, dropped 1.5 per cent to $74.20 per barrel in London.
OPEC countries agreed to produce more oil Friday, but investors aren’t sure the cartel will produce as much crude oil as it says it will.
Associated Press