On Friday, the labor report put the market at ease and made everyone decide that the tariff issue was not a big deal after all.  Today, having taking the weekend to mull it over some more, investors have taken on a renewed concern about the potential deleterious effects the tariffs may have on American companies.  In particular, Boeing and Caterpillar took a dive as two companies seen as most vulnerable to these new policies.  But really, as affirmed by today’s expert, any big multinational firm is now at risk, the Dow taking a 157 point hit on fairly average volume of 6.5 billion shares. 

mon  MARCH 12, 2018 / 6:02 pM

Dow, S&P weighed down by tariffs while tech boosts Nasdaq

April Joyner

DJ:  25,178.61  -157.13        NAS:  7,588.33  +27.51         S&P:  2,783.02  -3.55        3/12

NEW YORK (Reuters) - The S&P 500 and the Dow Jones Industrial Average slumped on Monday as the U.S. tariffs signed into law last week by President Donald Trump weighed on industrials, though gains in tech stocks boosted the Nasdaq.

Shares of companies such as Boeing Co (BA.N), down 2.9 percent, and Caterpillar Inc (CAT.N), down 2.4 percent, have been under pressure as Trump’s protectionist stance on steel and aluminum imports could increase costs and hamper sales abroad. Boeing and Caterpillar were the biggest decliners on the Dow.

Trump last week softened his stance on tariffs by exempting Canada and Mexico, and negotiations were ongoing as the European Union and Japan also seek exemptions.  “The big multinational, industrial companies of the world are all taking a hit on the concern that they will be the targets of reprisal sanctions,” said Robert Phipps, a director at Per Stirling Capital Management in Austin.

Concerns about possible fallout from the tariffs largely supplanted optimism, based upon the modest wage growth numbers from Friday’s employment report, that the Federal Reserve would stick to its projected three interest-rate increases in 2018.

Still, those numbers indicate a positive outlook for stocks despite today’s losses, said Anwiti Bahuguna, a senior portfolio manager at Columbia Threadneedle in Boston.

“We’ve seen stable, modest wage growth, nothing that should be considered harmful for equity markets,” she said.

“Growth stocks are doing well. It’s pretty much a continuation of last year’s rally, whereas the Dow has all sorts of other companies that may not be growth-oriented.”

The Dow Jones Industrial Average .DJI fell 157.13 points, or 0.62 percent, to 25,178.61, the S&P 500 .SPX lost 3.55 points, or 0.13 percent, to 2,783.02 and the Nasdaq Composite .IXICadded 27.52 points, or 0.36 percent, to 7,588.33.  Even with the session's losses, the S&P 500 is just 3.1 percent below record highs hit on Jan. 26, while the Nasdaq .IXIC has recovered its losses from last month's sell-off. 

The tech-heavy Nasdaq was lifted in part by further signs of official disapproval of Broadcom Ltd’s (AVGO.O) $117 billion bid for U.S. graphics chipmaker Qualcomm Inc (QCOM.O).  The U.S. Treasury said in a letter to Singapore-based Broadcom that it had confirmed national security concerns about the bid and that the company had not given sufficient notice of its plans to redomicile in the United States.  Broadcom gained 3.6 percent while shares in Qualcomm were flat.

Shares of Micron Technology (MU.O) rose 8.8 percent to $59.37 after analysts at Nomura raised their target for the stock to $100.  Oclaro (OCLR.O) jumped 27.5 percent after laser and optical fiber specialist Lumentum Holdings (LITE.O) said it would buy the optical components producer for $1.7 billion. Lumentum’s shares rose 4.4 percent. 

Advancing issues outnumbered declining ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.45-to-1 ratio favored advancers.  The S&P 500 posted 61 new 52-week highs and no new lows; the Nasdaq Composite recorded 211 new highs and 24 new lows.

Volume on U.S. exchanges was 6.52 billion shares, compared to the 7.2 billion average for the full session over the last 20 trading days.