Market Snapshot: Stock market slump as trade tensions weigh; consumer-staples shares lead losses

U.S. stocks on Monday, traded lower, albeit off session lows, with the Dow industrials on track for a five-day skid, as trade-war fears took center stage.

What are the main benchmarks doing?

The Dow Jones Industrial Average DJIA, -0.57% fell 144 points, or 0.7%, to 24,919 led by declines in Intel Corp. INTC, -3.68%  and Travelers Cos. Inc. TRV, -1.86% A decline for the blue-chip gauge would be its fifth straight, representing the longest such skid since a similar slump ended April 24.

The S&P 500 index SPX, -0.33% was down 0.3%, or 8 points, to 2,772, with a 1.6% decline in consumer staples and a 1.1% drop in health-care names, leading the broad-market benchmark down.

The Nasdaq Composite Index COMP, -0.08% retreated by 7 points, or 0.1%, to 7,749, having recovered significantly off its lows.

The Dow is up 0.8% for the year, while the S&P has gained 3.6%; both remain a few percentage points below record levels. The Nasdaq is up 12% for the year and is just below an all-time closing high hit Thursday.

What’s driving markets?

Markets remain fixated on an escalating trade spat between the U.S. and China. President Donald Trump on Friday announced tariffs on $50 billion worth of Chinese imports, and Beijing retaliated by targeting high-value American exports.

See: Stock-market investors see China tariffs as a ‘buzzkill’

What are strategists saying?

“Trade tensions with China have consistently been the biggest driver of equity volatility recently,” said Alec Young, managing director of global markets research at FTSE Russell, in a note. “If the current trade skirmish with China were to escalate into a full-blown trade war, it could potentially have a materially negative impact on corporate earnings growth.”

Which stocks are in focus?

Shares in Tesla Inc. TSLA, +2.90% rose 3.2% after CEO Elon Musk showed off the electric-car maker’s newest production line in a weekend tweet. He also predicted that those who are short on Tesla—meaning that they are betting for the stock to decline—“have about three weeks before their short position explodes.”

Valeant Pharmaceuticals International Inc. VRX, -11.34%  sank 10.5% after the Food and Drug Administration failed to approve a lotion product intended to treat plaque psoriasis.

U.S.-listed shares of Chinese e-commerce retailer JD.com Inc. JD, +0.36%  rose 0.3% after Google invested $550 million in the company. Google is a division of Alphabet Inc. GOOGL, +2.01%  

Solid Biosciences Inc. SLDB, +2.75%  said the Food and Drug Administration had lifted its clinical hold on the company’s treatment for Duchenne muscular dystrophy, allowing a Phase 1/11 trial to resume. Shares gained 3.4%.

Rent-A-Center Inc. RCII, +22.57%  surged 22% after it agreed to be taken private by Vintage Capital, a private and public equity firm, in a deal valued at about $1.365 billion.

Ziopharm Oncology Inc. ZIOP, -19.01%  plummeted 19% after the Food and Drug Administration placed a clinical hold on a Phase 1 trial of a treatment for cancer.

In the energy sector, Marathon Oil Corp. MRO, +1.48%  rose 2.7%, while Occidental Petroleum Corp. OXY, +0.34%  was up 1.7%.

Which economic reports are in focus?

The National Association of Home Builders’ monthly confidence index fell two points to 68 in June, in part due to rising lumber costs. The SPDR S&P Homebuilder ETF XHB, -1.04%  fell 0.2%.

On the Federal Reserve front, Atlanta Fed President Raphael Bostic said Monday at the Rotary Club of Savannah that the central bank still hasn’t reached the so-called neutral rate — where policy is neither accommodative nor restrictive.

Ahead, incoming New York Fed President John Williams is due to speak in New York at 4 p.m. Eastern at a conference focused on reforming behavior in financial services.

Check out: MarketWatch’s Economic Calendar

What are other markets doing?

European stocks SXXP, -0.83% finished lower, after Asian markets ended mostly lower, though Chinese markets were shut for a holiday.

Gold futures GCM8, +0.19% gained, the U.S. oil benchmark CLN8, +1.11% were rebounding, and Brent crude climbed 1.1%, rebounding after a sharp decline on Friday. The ICE U.S. Dollar Index DXY, -0.09% was little changed.

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