President Trump kicked the stock market back to a news-driven focus Wednesday, as new tariff threats from the White House overshadowed the start of Q2 earnings season.
The Dow Jones industrial average carved a 0.7% loss, while the small cap Russell 2000 sliced 0.5%. The S&P 500 and the Nasdaq lost 0.6% and 0.4% respectively.
Volume rose slightly on both major exchanges.
Trump threatened to smack China with additional tariffs on $200 billion worth of imports. This would take the standoff beyond the matching level.
China has been responding to Trump’s measures with equal-sized tariffs, but China imports only $130 billion in U.S. goods. The United States imports more than $500 billion of Chinese goods, the Los Angeles Times reported.
The new tariffs would not go into effect until public hearings are completed Aug. 20-23.
Blue chips have had the most difficulties with the trade war. Wednesday was no different. Among the 30 Dow components, Caterpillar (CAT) dropped 3%; Chevron (CVX), 3%; DowDuPont (DWDP), 2.5%; and Boeing (BA), almost 2%.
In the IBD 50, a list of the best stocks in fundamentals and technicals, losers and winners were about even.
With Q2 earnings season just getting underway, only a few stocks reported quarterly results Wednesday. Two that did report were from the building products industry group.
Fastenal Soars On Earnings
Construction supply stores operator Fastenal (FAST) jumped 10% in huge volume. The company reported a 42% increase in earnings.
The Street had expected a 27% gain. Revenue rose 13%, just above views.
Fastenal announced a dividend increase. The company’s quarterly payout was raised from 37 cents a share to 40 cents a share.
The dividend will be paid Aug. 22 to shareholders of record at the July 25 close. The annualized yield is about 3%.
Maintenance supplies distributor MSC Industrial Direct (MSM) plunged 5% after reporting earnings growth in line with the consensus view of 28%. The company missed the Street’s revenue estimate for Q3.
Both Fastenal and MSC Industrial have modest foreign exposure.
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