Here Are 3 Hot Things to Know About Stocks Right Now
- Stocks ended down for a second straight session Tuesday as investors reacted to more market volatility amid heightened trade tensions between the U.S. and China.
- Shares of Boeing (BA) declined after analysts at Barclays downgraded their rating on the aerospace giant to equal weight from overweight.
- American International Group (AIG) soared after the insurance company beat Wall Street's first-quarter earnings forecasts.
Wall Street Overview
Stocks ended down sharply Tuesday as investors reacted to heated trade rhetoric between the U.S. and China for a second day.
The Dow Jones Industrial Average ended down 473 points, or 1.79%, to 25,965, after earlier falling as much as 648 points. It was the index's first close below 26,000 since March 29. The S&P 500 declined 1.65% and the Nasdaq sank 1.96%.
U.S. Trade Representative Robert Lighthizer complained about "an erosion in commitments by China" and said tariffs on $200 billion in Chinese imports would rise to 25% starting Friday. Lighthizer's comments followed threatening tweets from President Donald Trump that rattled markets on Monday.
"The mood on Wall Street is downbeat as heightened trade tensions between the U.S. and China has taken hold of traders," said David Madden, a market analyst at CMC Markets UK. "For months we've been drip-fed broadly positive news about the trade talks, and that pushed U.S. indices like the S&P 500 and Nasdaq-100 to record highs, and now the investors are trimming their positions."
All 30 stocks in the Dow were trading to the downside. Leading the Dow lower was Boeing (BA) , which fell 3.8% to $357.40 after analysts at Barclays downgraded their rating on the aerospace giant to equal weight from overweight, saying they expected the recovery of 737 MAX production to take longer than expected. The troubled aircraft has been grounded following two fatal crashes that killed a total of 346 people.
"Trade war concerns have ebbed and flowed in the last eighteen months, that part isn't new," said Putri Pascualy, Managing Director for PAAMCO. "What is new is market reaction. Previously investors happily shrugged trade risk, citing growth as a reason for bullishness. These days, risk factors aren't being shrugged off so easily. The math on risk premia for multiple asset classes have changed."
"While a decline of 500 points or more can be a bit hair-raising its crucial to keep in mind that we're only talking about a few percentage points, which is a very normal move for the market," said Mike Loewengart, vice president of investment strategy at E*Trade Financial Corp. "Ebbs and flows are natural and shouldn't let investors react emotionally. We've had one heck of a bullish ride so far this year so it makes sense that the bears out there would latch on to the negative trade talk coming out of the oval office."
Anadarko (APC) rose slightly to $75.81 after the Woodlands, Texas-based company's board approved a $38 billion takeover bid from Occidental (OXY) over a rival offer from Chevron (CVX) and it agreed to sell some of its African assets to France's Total (TOT) . Occidental shares advanced 1.5% to $59.65, while Chevron dropped slightly to $118.25.
Shares of Walt Disney (DIS) dropped 1.13% to $133.48 even though BMO analyst Daniel Salmon raised his target price on the entertainment company to $170 from $140 and kept his outperform rating ahead of Disney second-quarter results to be released Wednesday.
In economic news, the number of jobs waiting to be filled rose by 346,000 to 7.49 million, from an upwardly revised 7.14 million in the previous month, according to the Labor Department's Job Openings and Labor Turnover Survey.
Anadarko and Disney are holdings in Jim Cramer's charitable trust. Click here for a free 14-day trial of Jim's Action Alert PLUS club for investors.