Stocks are not reacting well to new trade fight headlines, though that familar refrain now has a new front after President Donald Trump shocked markets with the threat to impose new tariffs on Mexico. Last night, President Trump tweeted: "On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed. Details from the White House to follow." That tweet, and subsequent ones on the same subject, have rattled investors, who are still on edge regarding ongoing U.S. trade tensions with China, which also show no signs of easing soon.
ECONOMIC EVENTS: In the U.S., personal income rose 0.5% with spending up 0.3% in April. The Chicago PMI edged up 1.6 points to 54.2 in May, which was a little better than forecast. The final University of Michigan consumer sentiment survey for May came in at 100.0, which was up from the 97.2 April reading, but down from the preliminary 102.4 figure for this month.
In China, the National Bureau of Statistics' PMI readings for May were generally underwhelming, as the official government manufacturing PMI slumped to 49.4 from April's 50.1 reading. The non-manufacturing PMI was flat compared to April with a reading of 54.3.
TOP NEWS: The Gap (GPS) is the worst performing stock on the S&P 500, sliding 11% following the Q1 miss and fiscal year guide down reported last night by the apparel retailer.
Many of the other worst performers on the S&P 500 this morning are companies with outsized exposure to Mexico, including Kansas City Southern (KSU), Constellation Brands (STZ) and General Motors (GM).
Uber (UBER) is among the stocks moving higher during the market's broad selloff, rising fractionally following the ridesharing company's first earnings report since coming public. After the quarterly report, Atlantic Equities analyst James Cordwell upgraded Uber to Overweight from Neutral, citing his view that the ridehailing competitive environment is becoming "increasingly benign," which he expects to drive accelerating revenue growth and moderating segment losses across fiscal 2019.
Amazon (AMZN) is interested in acquiring Boost Mobile from T-Mobile (TMUS) and Sprint (S), mainly for an attached wholesale deal that would let the buyer use T-Mobile's wireless network for at least six years, Reuters reported last night. Following the report, Oppenheimer analyst Timothy Horan said that he believes such a deal would be "highly disruptive" to the industry, but would enable approval for the Sprint-T-Mobile merger. The analyst sees AT&T (T) and Verizon (VZ) trading down on the news, and Sprint trading higher. Near noon, Verizon and AT&T shares are each down about 3%, while Sprint shares are down 4%.
MAJOR MOVERS: Among the noteworthy gainers were Genesco (GCO) and Williams-Sonoma (WSM), which rose 14% and 13%, respectively after their earnings reports.
Among the notable losers following earnings were Zuora (ZUO), which fell 30%, and Nutanix (NTNX), which declined 15%.
INDEXES: Near midday, the Dow was down 229.46, or 0.91%, to 24,940.42, the Nasdaq was down 72.75, or 0.96%, to 7,494.97, and the S&P 500 was down 24.03, or 0.86%, to 2,764.83.