Dow, S&P 500 edge down after Trump cancels North Korea summit; Netflix gains


NEW YORK (Reuters) – U.S. stocks mostly eased on Thursday after President Donald Trump canceled a planned summit with North Korea’s Kim Jong Un and ordered a probe of auto imports, while gains in Netflix (NFLX.O) pushed its market value to a record.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 21, 2018. REUTERS/Brendan McDermid

The auto probe, ordered on Wednesday, added to worries of another potential trade conflict when tensions with China simmered.

Early Thursday, Trump canceled the June 12 meeting citing Pyongyang’s “open hostility,” even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site.

Market participants said the sharp drop after the summit was canceled was a knee-jerk reaction.

“People were genuinely pleased that it was going to happen,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“And I still wouldn’t be surprised to see a reversal of this reversal sometime in the next few weeks as each side sits down and thinks about what’s really in its best interest.”

A decline in energy shares following lower oil prices also weighed on the market, though some of the weakness was offset by Netflix. The S&P energy index .SPNY was down 1.7 percent.

Netflix’s stock market value ballooned to a record $153 billion and eclipsed Walt Disney Co (DIS.N) for the first time, making it the world’s most valuable entertainment company. Netflix shares were up 1.9 percent, helping the Nasdaq and S&P 500.

At 3:34 p.m. (1934 GMT), the Dow Jones Industrial Average .DJI fell 54.63 points, or 0.22 percent, to 24,832.18, the S&P 500 .SPX lost 3.96 points, or 0.14 percent, to 2,729.33 and the Nasdaq Composite .IXIC added 7.53 points, or 0.1 percent, to 7,433.48.

Earlier in the session the blue chip Dow touched a two-week low.

Defense stocks jumped after Trump called off the North Korea meeting and warned that the U.S. military was ready in the event of any “reckless” acts by North Korea.

Ford (F.N) and General Motors (GM.N) gained on the possibility of tariffs on European and Asian car imports. U.S.-listed shares of Fiat (FCAU.N) fell 1 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.05-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored decliners.

The S&P 500 posted 21 new 52-week highs and one new low; the Nasdaq Composite recorded 103 new highs and 41 new lows.

Additional reporting by Medha Singh and Savio D’Souza in Bengaluru; Editing by Sriraj Kalluvila and James Dalgleish

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