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Stocks Close Lower As Chips, Oil Feel The Impact Of Trade War

Stocks closed lower after the latest skirmish in the trade war sparked broad selling.

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The market’s decline started in extended trading Tuesday evening, following reports that the U.S. was preparing tariffs on an additional $200 billion worth of imported goods. The weakness never subsided.

The Nasdaq composite fell nearly 0.6%, the S&P 500 0.7% and the Dow Jones industrial average 0.9%. The Russell 2000 shed 0.5%.

Volume was higher, according to early figures. Losses were broad, with decliners over advancers by a 5-2 ratio on the NYSE and by 9-to-5 on the Nasdaq.

Semiconductors — which some analysts say are more vulnerable to a trade war than many other sectors — were one of the weakest segments of the stock market.

The Philadelphia semiconductor index plunged 2.6%. It fell right back below the 50-day moving average, barely one day after the index had climbed back above it. IBD’s chip equipment industry group fell more than 3%, while chipmakers and chip designers fell 2.3%.

Energy stocks also were broadly lower. U.S. crude dived 5% to settle at $70.38 a barrel. President Trump’s trade rift with China and Libya’s resumption of exports hurt global prices, overshadowing a surprisingly large decline in domestic crude stockpiles.

Airlines, railroads and shipping companies were in the bottom 30 industry groups Wednesday, contributing to a 1.1% decline in the Dow transports. American Airlines (AAL) tumbled in heavy trading to the lowest price since September 2016 after the carrier cut its Q2 revenue forecast.

Some defensive industry groups were among the day’s top industry groups. Those included soft drinks and utilities. Also, media, software and internet groups were able to buck the market’s downward drift.

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