U.S. steel stocks fall as trade war intensifies

U.S. steel stocks fall as trade war intensifies

(Reuters) - Shares in U.S. steel stocks fell on Friday as investors worried about escalating global trade tensions after President Donald Trump announced hefty tariffs on China.

Industrial and materials indexes also ended down, though above their session lows, after the Trump administration said early on Friday it was placing a 25 percent tariff on $50 billion of goods from China related to intellectual property and technology, and pledged to impose further levies if China retaliates.

Within minutes, China said it planned to retaliate and announced 25 percent tariffs on U.S. goods worth $50 billion.

The Trump administration had previously announced tariffs on imported steel and aluminium coming from several countries.

Canada and Mexico have said they will retaliate for the Washington-imposed metals tariffs.

The S&P 1500 Steel index <.SPCOMSTEEL> fell 2.8 percent, while U.S. Steel Corp shares closed down 4.2 percent.

Steel Dynamics shares closed off 4.6 percent and Nucor Corp shares fell 2.4 percent after both also issued financial expectations for the current quarter.

"The (steel company) earnings have been strong as a result of the tariffs the administration put in place already. Investors are worried that with the trade war escalating today it's better to sell ... and take profits," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

If U.S. industrial sales to China are curtailed, investors worry this would indirectly hurt demand for steel and other materials used in products, such as agricultural machinery, O'Rourke said.

Shares of aluminium supplier Alcoa fell 5.2 percent.

The S&P 500 materials index <.SPLRCM> closed down 0.6 percent, while the industrials index <.SPLRCI> fell 0.3 percent.

Boeing Co , down 1.3 percent, and Caterpillar Inc , which fell 2 percent, were the biggest drags on the industrials sector.

"Industrial stocks are being hurt by the trade sanctions announced by the U.S., and compounding it is the stronger dollar," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Strength in the dollar often hurts companies selling goods overseas as it makes their prices less competitive.

The dollar index <.DXY>, which measures the greenback against a basket of other major currencies, was flat but still on track for a 2.9 percent increase for the year to date.

(Reporting by Sinéad Carew; Editing by James Dalgleish and Bill Berkrot)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Jun 16, 2018 03:06 AM

Also Watch

Social Media Star: Abhishek Bachchan, Varun Grover reveal how they handle selfies, trolls and broccoli
  • Monday, July 16, 2018 It's a Wrap: Soorma star Diljit Dosanjh and Hockey legend Sandeep Singh in conversation with Parul Sharma
  • Monday, July 16, 2018 Watch: Dalit man in Uttar Pradesh defies decades of prejudice by taking out baraat in Thakur-dominated Nizampur village
  • Monday, July 16, 2018 India's water crisis: After govt apathy, Odisha farmer carves out 3-km canal from hills to tackle scarcity in village
  • Sunday, July 15, 2018 Maurizio Sarri, named as new Chelsea manager, is owner Roman Abramovich's latest gamble in quest for 'perfect football'

Also See