US stock market: Investors hunting bargains or seeking safety?

By StocksFOXBusiness

Investors' trade war concerns are justified but won't come through: Stovall

CFRA Research Analyst Sam Stovall on the impact of trade war concerns on the markets.

U.S. stocks have regrouped since their opening bell plunge, with the major stock indexes hovering near their breakeven point in afternoon trade.

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Stocks slumped Wednesday morning as investors weighed possible effects of China’s overnight imposition of $50 billion in tariffs on American imports.

Beijing's tariffs on 106 types of American imports, including soybeans, autos and chemical products, are a response to Washington's plans to place tariffs on around 1,300 industrial technology, transport and medical products, as well as steel and aluminum, from China.

Fears of a trade war between the world’s top two economies, which drove investors to flee stocks on Wednesday, are pushing out investors’ instincts to hunt for bargains.

TickerSecurityLastChange%Chg
BABOEING COMPANY337.70+8.64+2.63%
GMGENERAL MOTORS COMPANY37.66-0.27-0.70%
GOOGLALPHABET INC.1,023.11+0.47+0.05%
CATCATERPILLAR INC.144.17-0.27-0.18%
AMZNAMAZON.COM INC.1,426.04-34.05-2.33%

Boeing (BA) shares plunged and shares of Alphabet (GOOGL), which owns search engine Google also retreated.

Amazon (AMZN) shares fell  on President Trump’s continued angry tweets against the giant online retailer.

Some commodities also fell. The wholesale price of crude oil, from which refiners get gasoline, jet fuel and diesel, fell about 1.5%, a two-week low, on fears that a trade war will slow economic activity.

“While global markets have been feeling the strain, the announcement of exactly where China was going to target its $50 billion worth of tariffs has now pushed the focus onto specific markets with the targeted response likely to drive losses across agriculture, chemicals, autos, aircrafts and more,” Joshua Mahony, market analyst at IG, said.

Asian markets closed mixed. In China, the Shanghai Composite gave up early gains to close down 0.2%. Japan's Nikkei ended the day higher by 0.1%.

“What matters now is the extent to which both sides engage in dialogue,” said Peter Dixon, global equities economist at Commerzbank. “The U.S. has made its point that is prepared to take action to defend its interests and China has met with an equally robust response. If we continue with tit-for-tat moves, we could very quickly move towards the much-feared trade war.”

European markets closed lower.

On Tuesday U.S. stocks rebounded from Monday's pummeling, with the Dow climbing back above 24,000 a day after a selloff in technology giants, including Facebook. The Dow rose 389.17 points, or 1.6%, to 24,033.36, while the S&P 500 added 32.57, or 1.3%, to 2,614.45 and the tech-laden Nasdaq increased 71.16, or 1%, to 6,941.28.