By Amy Caren Daniel
(Reuters) - U.S. stocks posted broad-based declines on Monday after President Donald Trump threatened to raise tariffs on Chinese goods this week, triggering worries about a global economic slowdown.
Trump on Sunday said tariffs on $200 billion worth of Chinese goods would increase to 25% from 10%, reversing a decision he made in February to retain them at 10% as the two sides made progress on trade talks.
China said on Monday a delegation is still preparing to go to the United States, but did not mention if Vice Premier Liu He, its lead official in the negotiations, will be part of the team as originally planned.
The threat sent the S&P 500 down as much as 1.6% during the session and led to a drop in U.S. Treasury yields as investors turned to low-risk government bonds. However, the major indexes pared some losses in afternoon trading. [US/]
"Obviously it was a negative start, but the market still appears confident that we will get a China trade deal and this was Trump's art of the deal strategy," said Gary Bradshaw, portfolio manager with Hodges Funds in Dallas.
"There is a great chance for a trade deal to be reached, it's a win-win for both sides, and I don't think that China would walk away from it."
Boeing (NYSE:BA) Co, the single largest U.S. exporter to China, fell 1.7%, while chipmakers, which get a good portion of their revenue from China, also tumbled.
The Philadelphia chip index slid 2.70%, while the broader technology sector fell 1.57%, the most among the 11 major sectors trading lower.
Apple Inc (NASDAQ:AAPL) declined 2.3%, dragging the tech sector lower, while other marquee names such as Amazon.com Inc (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT) and Facebook Inc (NASDAQ:FB) fell about 1%.
At 12:27 p.m. ET the Dow Jones Industrial Average was down 239.12 points, or 0.90%, at 26,265.83. The S&P 500 was down 29.29 points, or 0.99%, at 2,916.35 and the Nasdaq Composite was down 92.22 points, or 1.13%, at 8,071.78.
The benchmark S&P 500 is now about 1% away from its intra-day record high of 2,954.13 hit last week.
Automakers General Motors Co (NYSE:GM) declined 2.3%, while Ford Motor (NYSE:F) dipped 0.6%.
In a bright spot, Anadarko Petroleum Corp (NYSE:APC) rose 3.8% after Occidental Petroleum Corp (NYSE:OXY) increased the cash component of its $38 billion bid, removing a need for any deal to receive the approval of Occidental's shareholders.
Occidental is trying to convince Anadarko to accept its offer and abandon the agreed $33 billion sale to Chevron Corp. (NYSE:CVX) The oil major was up 1.5%.
Declining issues outnumbered advancers for a 2.15-to-1 ratio on the NYSE and for a 1.58-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and four new lows, while the Nasdaq recorded 44 new highs and 31 new lows.