By April Joyner
NEW YORK (Reuters) - U.S. stocks fell on Wednesday on renewed uncertainty regarding the U.S. stance on Chinese investments in American technology companies, reversing gains earlier in the session.
At the market open, stocks rose as President Donald Trump said he will use a strengthened national security review panel — the Committee on Foreign Investment in the United States (CFIUS) — to deal with potential threats from Chinese acquisitions of U.S. technology, instead of imposing China-specific restrictions.
The decision was seen by investors as a somewhat softer approach than plans reported earlier to block firms with at least 25 percent Chinese ownership from buying U.S. tech firms.
But later on Wednesday, White House economic adviser Larry Kudlow said in an interview on Fox Business Network that Trump's announced plan did not indicate a softened stance on China.
"The market took that as a sign that the hardline approach to China has not waned," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
The S&P 500 technology sector <.SPLRCT> fell 1.5 percent, weighing the most on the broader S&P 500 index. Chipmakers, which derive much of their revenue from China, fell even more. The Philadelphia semiconductor index <.SOX> slid 2.5 percent.
Stocks were pressured further by a rise in the U.S. dollar. A jump in oil prices to their highest in more than three years boosted the S&P 500 energy index 1.3 percent, but some investors raised concern that they may have a negative effect on other sectors.
"It was a combination of (trade) and the dollar strength. Oil is really strong today. You've a rally in Treasuries, too. A lot of it is snowballing," said Mark Kepner, equity trader at Themis Trading in Chatham, New Jersey.
The Dow Jones Industrial Average <.DJI> fell 165.52 points, or 0.68 percent, to 24,117.59, the S&P 500 <.SPX> lost 23.43 points, or 0.86 percent, to 2,699.63 and the Nasdaq Composite <.IXIC> dropped 116.54 points, or 1.54 percent, to 7,445.09.
The small-cap Russell 2000 index <.RUT> declined 1.7 percent. It has recently rallied on uncertainty in trade relations, given that small-cap companies are more domestically focussed than their large-cap counterparts.
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Declining issues outnumbered advancing ones on the NYSE by a 2.58-to-1 ratio; on Nasdaq, a 4.11-to-1 ratio favored decliners.
The S&P 500 posted 13 new 52-week highs and 16 new lows; the Nasdaq Composite recorded 54 new highs and 81 new lows.
Volume on U.S. exchanges was 7.72 billion shares, compared to the 7.33 billion average for the full session over the last 20 trading days.
(Additional reporting by Sruthi Shankar in Bengaluru and Sinéad Carew in New York; Editing by Shounak Dasgupta and Tom Brown)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Jun 28, 2018 03:05 AM