By Shreyashi Sanyal
(Reuters) - U.S. stocks tumbled on Tuesday as a drop in heavyweights Facebook and Nike added to worries over trade negotiations between the United States and other major economies.
Nike dropped 2.1 percent, top drag on the Dow Jones Industrial Average, as calls for a boycott of the sportswear giant gained traction on social media after it chose Colin Kaepernick as a face for adverts marking the 30th anniversary of its "Just Do It" slogan.
Facebook fell 3 percent after brokerage MoffettNathanson downgraded the social media giant to "neutral" from "buy" citing revenue growth deceleration.
The S&P technology index fell 0.7 percent, on track to post its biggest loss since Aug. 15.
"This has more to do with the fact that the markets have had a strong run in the past two to three weeks and it is normal for people to take a little bit of profits off the table," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
Also Read
Investors are cautious as a fresh round of U.S tariffs on $200 billion worth of Chinese goods are expected to take effect after a public comment period ends on Sept. 5.
Talks between Canada and the United States to renegotiate the North American Free Trade Agreement (NAFTA) ended on a sour note on Friday, but officials set plans to resume their talks on Wednesday.
Despite the looming tariff threats and trade uncertainties, the major U.S. indexes closed higher in August, with the Nasdaq posting its largest monthly gain since January.
However, traders are cautious about September.
"Some of the largest slips tend to take place during September. Although the economy is still quite strong and stocks are marking hew highs, this doesn't mean some usual September volatility is out of the question," said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
Nine of the 11 major S&P 500 sectors were lower, led by a 1.12 percent drop in the telecom sector.
Verizon fell 1.9 percent after Barclays downgraded the wireless carrier's stock.
At 10:06 a.m. ET the Dow Jones Industrial Average was down 108.52 points, or 0.42 percent, at 25,856.30, the S&P 500 was down 8.61 points, or 0.30 percent, at 2,892.91 and the Nasdaq Composite was down 39.01 points, or 0.48 percent, at 8,070.53.
Advanced Micro Devices gained 5.2 percent and Qualcomm was up 1.8 percent after brokerages upgraded the chip stocks.
The energy sector gained 0.4 percent as oil prices rose after the evacuation of two Gulf of Mexico oil platforms ahead of the approach of Gordon, which is expected to come ashore as a hurricane.
Declining issues outnumbered advancers for a 1.79-to-1 ratio on the NYSE and a 1.92-to-1 ratio on the Nasdaq.
The S&P index recorded 35 new 52-week highs and six new lows, while the Nasdaq recorded 82 new highs and 27 new lows.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)
Disclaimer: No Business Standard Journalist was involved in creation of this content