We have now had three consecutive sessions where investors are still not giving the financial sector its due rewards on the heels of this week’s Fed rate increase, which is supposed to benefit banks.  Instead, the Dow plunged another 84 points today (after a rather riotous session which saw it plunge almost 300 until nearly closing) with energy being the biggest loser with oil down more than 2 percent.  The continuing negativity today was the result of the market once again focusing on trade wars, which had been conveniently ignored in sessions earlier this week, but with today’s renewed tariff threats against China and China’s renewed threats of retaliation, the companies most vulnerable to trade war worries all plunged.  Then there was the triple whammy of the so-called “quadruple witching” effect as the simultaneous expiration and repurchasing of options and futures contracts caused volume to artificially soar to the highest point since February with nearly 10 billion shares exchanging hands.  So Monday will prove a more accurate picture of the effects of these tariffs and tariff retaliations on the market. 

fri  JUNE 15, 2018 / 5:25  pm 

Wall Street ends high-volume session lower on trade jitters

Stephen Culp

DJ:  25,090.48  -84.83        NAS:  7,746.38  -14.66        S&P:  2,779.66  -2.83        6/15

NEW YORK (Reuters) - Wall Street stocks ended lower on Friday, capping a day of heavy trading with investors mostly pulling back from initial concerns over an escalating trade dispute between the United States and China.  U.S. President Donald Trump unveiled an initial list of strategically important goods that would be subject to a 25 percent tariff effective July 6, a move China’s Commerce Ministry called “a threat to China’s economic interest and security.”  China issued its own list of U.S. imports subject to tariffs, targeting soybeans, aircraft, autos and chemicals.

Since early May, the two countries have held several rounds of talks but have yet to reach a deal, as the United States pressures China to narrow a $375 billion trade deficit.  “A lot of people may have over-reacted at the very beginning of the day,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.  “I don’t think a trade war is going to be inevitable,” Pavlik said. “I think (the president is) posturing, I think he’s chest-pounding, I think he’s doing exactly what he thinks he got elected to do.”

Friday also marked “quadruple witching day,” the quarterly simultaneous expiration of U.S. options and futures contracts, which tends to boost trading volume as investors replace expiring positions.  Volume hit the highest point since Feb. 8, when the S&P 500 sank to its lowest level of the year so far. 

Companies considered the most sensitive to trade war worries were among the day’s biggest drags. Shares of Boeing Inc (BA.N), the single-largest U.S. exporter to China, fell 1.3 percent, while tariff-sensitive construction equipment maker Caterpillar Inc (CAT.N) and chemical company DowDupont Inc (DWDP.N) were down 2.0 percent and 0.9 percent, respectively. 

The Dow Jones Industrial Average .DJI fell 84.83 points, or 0.34 percent, to 25,090.48, the S&P 500 .SPX lost 2.83 points, or 0.11 percent, to 2,779.66 and the Nasdaq Composite .IXIC dropped 14.66 points, or 0.19 percent, to 7,746.38.  For the week, the Dow was down 0.9 percent while the S&P 500 rose 0.01 percent and the Nasdaq gained 1.3 percent, its fourth consecutive weekly advance.  Of the 11 major sectors of the S&P 500 six ended the day in negative territory. 

The energy sector .SPNY was the biggest percentage loser, down 2.1 percent as oil prices LCOc1 tumbled more than 3 percent ahead of next week’s OPEC meeting.  Declining issues outnumbered advancing ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored advancers.  The S&P 500 posted 23 new 52-week highs and four new lows; the Nasdaq Composite recorded 152 new highs and 40 new lows.

Volume on U.S. exchanges was 9.9 billion shares, compared to the 6.9 billion average for the full session over the last 20 trading days.