Stocks slip after Trump scraps summit with North Korea’s Kim
NEW YORK (AP) — U.S. stocks are lower Thursday morning after President Donald Trump said he is canceling 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.
KEEPING SCORE: The S&P 500 index dropped 12 points, or 0.4 percent, to 2,7217 as of 10 a.m. Eastern time. The Dow Jones industrial average lost 119 points, or 0.5 percent, to 24,759. The Nasdaq composite shed 24 points, or 0.3 percent, to 7,402. The Russell 2000 index of smaller-company stocks slipped 3 points, or 0.2 percent, to 1,623.
Technology companies took some of the worst losses. Microsoft fell 0.9 percent to $97.74 and Intel gave up 0.9 percent to $54.70. Video game maker Electronic Arts slid 1.7 percent to $131.26.
ENERGY: Benchmark U.S. crude lost 1 percent to $71.12 per barrel in New York. Brent crude, used to price international oils, fell 1 percent to $79.04 a barrel in London.
Reuters 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. 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.
NORTH KOREA: Stocks were little changed at the start of trading, but turned lower after the White House announced that the planned meeting between Trump and Kim was off. An open letter from Trump said he was canceling the June 12 summit because of "tremendous anger and open hostility" in a recent statement by a North Korean official.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.96 percent from 2.99 percent, and banks traded lower.
BRAKING NEWS: The Trump administration plans to start an investigation into whether tariffs are needed on imports of vehicles and automotive parts. A little-used U.S. law authorizes the president to restrict imports and impose unlimited tariffs on national security grounds, and 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 2.4 percent to $21.93 and Tata Motors fell 6.2 percent to $21.01. In Japan, Toyota shares fell 3.1 percent.
CURRENCIES: The dollar fell to 109.14 yen from 110.07 yen. The euro rose to $1.1731 from $1.1698.
OVERSEAS: Germany's DAX lost 0.6 percent and the FTSE 100 in Britain fell 0.4 percent. The CAC 40 in France shed 0.2 percent. Japan's Nikkei 225 index fell 1.1 percent and the Kospi in South Korea slipped 0.2 percent.