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China-sensitive stocks slide sharply as yuan move adds to trade-war fears

Consumer-goods companies join chip makers and others in reacting to threat of new 10% tariff on $300 billion of China imports

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By Ciara Linnane, MarketWatch


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New tariffs will apply to footwear and apparel imports from China, which mostly escaped earlier rounds.

A range of stocks of companies with heavy exposure to China fell sharply Monday, after China allowed the yuan to fall to a fresh low against the dollar, exacerbating concerns about the current trade conflict with the U.S.

“Trade continues to trend in the wrong direction, as in retaliation for new tariffs, China let the yuan move to a 10-year low versus the U.S. dollar,” Ryan Detrick, senior market strategist at LPL Financial, said in emailed comments. “Any hopes of a quick resolution with China are fading quickly.”

China allowed the yuan to fall below the key 7-to-the-dollar level, after President Donald Trump’s threat last week to impose further tariffs of 10% on $300 billion of imports from China. The move has sparked a sharp selloff in global stock markets, with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.90% down more than 500 points in early trade.

Tom Elliott, international investment strategist at Devere Group, a financial advisory organization, said the weaker yuan will export deflationary pressure around the world’s manufacturing industries.

See: Trump says Fed should ‘listen’ as yuan skids below key level

“Chinese goods, always competitive on price, will be even more competitive,” said Elliott. “This is therefore bad news for manufacturers outside of China, at a time when global manufacturing is struggling with weakening demand growth and the negative impact of the U.S.-China trade dispute on their supply lines and profits.”

See: Why U.S. stocks remain vulnerable as Trump trade tweets revive global growth jitters

This time, the tariffs will apply to consumer goods, sweeping up a broader range of companies than earlier tariffs, including apparel and footwear companies. Those companies were mostly excluded from the 25% tariffs already imposed on $250 billion of goods from China, apart from accessories such as handbags, textiles, leather and cotton.

Read: Gap, Kohl’s, Nordstrom among retail stock declines after Trump announces tariffs

Against that background, Allen Edmonds and Dr. Scholl’s parent Caleres Inc. /zigman2/quotes/206226741/composite CAL +0.93% was down 4.3% and Sperry and Hush Puppies parent Wolverine World Wide Inc. /zigman2/quotes/209231729/composite WWW +0.08% was down 1.9%. Nike Inc. /zigman2/quotes/203439053/composite NKE -0.82% was down 1.9%, and Skechers USA was down 4.2%.

The Consumer Discretionary Select Sector SPDR Fund /zigman2/quotes/200844504/composite XLY +1.17%  was down 2%.

Don’t miss: The trade war is making U.S. pork producers squeal

Shares of Apple Inc. /zigman2/quotes/202934861/composite AAPL +3.38% , which both makes products in China and sells them there, were down 4%, while Best Buy /zigman2/quotes/205918291/composite BBY +0.80% was down 4.8%. Department-store chain Kohls Corp. /zigman2/quotes/210414114/composite KSS -1.53% was down 3.8%, and Nordstrom Inc. /zigman2/quotes/203902116/composite JWN -1.63% was down 3.4% and Macy’s Inc. /zigman2/quotes/201854387/composite M -2.70% 5.7%.

Other companies with sizable amounts of revenue coming from China were also sharply lower. Caterpillar Inc. /zigman2/quotes/203434128/composite CAT -0.21% was down 2.3%, FedEx Corp. /zigman2/quotes/203047719/composite FDX +4.44% was down 3.6%.

A.O. Smith Corp. /zigman2/quotes/208962119/composite AOS +0.76% , which sells heating and cooling systems along with air-purification systems in China, was down 1.7%.

The Industrial Select Sector SPDR Fund /zigman2/quotes/202026558/composite XLI +0.59% was down 2.1%.

See: Retailers including Walmart warned the trade war will cost U.S. households — JPMorgan says it already is

In the chip sector, Intel Corp. /zigman2/quotes/203649727/composite INTC +1.83% was off 3.3%, Advanced Micro Devices Inc. /zigman2/quotes/208144392/composite AMD +6.32% was down 4.1%. The PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX +3.10% was down 3.8%.

Chinese ADRs were caught up in the downdraft. E-commerce giant Alibaba Group Holding Inc. /zigman2/quotes/201948298/composite BABA +2.66% was down 2.8%, electric car maker Nio Inc. /zigman2/quotes/204905836/composite NIO +1.19% was down 7%, internet giant JD.com Inc. /zigman2/quotes/205122565/composite JD +3.33% was down 5%, streaming company iQiyi Inc. /zigman2/quotes/203657421/composite IQ +2.04% was down 4% and shopping app Pinduoduo Inc. /zigman2/quotes/208876581/composite PDD +3.52% was down 4.7%.

All 30 components of the Dow Jones Industrial Average were lower. The S&P 500 /zigman2/quotes/210599714/realtime SPX +1.44% was down 2%, and the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +2.21% was saddled with a 200-plus-point decline.

See also: This is why large retailers like Amazon, Walmart & Costco won’t be as impacted by fresh tariffs

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,937.16
+250.25 +0.90%
Volume: 159.88M
Aug. 12, 2020 12:30p
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/zigman2/quotes/206226741/composite
US : U.S.: NYSE
$ 7.60
+0.07 +0.93%
Volume: 384,007
Aug. 12, 2020 12:29p
P/E Ratio
N/A
Dividend Yield
3.70%
Market Cap
$291.95 million
Rev. per Employee
$236,237
loading...
/zigman2/quotes/209231729/composite
US : U.S.: NYSE
$ 25.04
+0.02 +0.08%
Volume: 117,872
Aug. 12, 2020 12:24p
P/E Ratio
36.09
Dividend Yield
1.60%
Market Cap
$2.05 billion
Rev. per Employee
$605,189
loading...
/zigman2/quotes/203439053/composite
US : U.S.: NYSE
$ 104.26
-0.86 -0.82%
Volume: 2.11M
Aug. 12, 2020 12:30p
P/E Ratio
65.90
Dividend Yield
0.94%
Market Cap
$163.97 billion
Rev. per Employee
$529,466
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/zigman2/quotes/200844504/composite
US : U.S.: NYSE Arca
$ 143.44
+1.66 +1.17%
Volume: 1.19M
Aug. 12, 2020 12:30p
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/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 452.30
+14.80 +3.38%
Volume: 20.41M
Aug. 12, 2020 12:30p
P/E Ratio
34.32
Dividend Yield
0.73%
Market Cap
$1870.59 billion
Rev. per Employee
$1.98M
loading...
/zigman2/quotes/205918291/composite
US : U.S.: NYSE
$ 104.95
+0.83 +0.80%
Volume: 474,721
Aug. 12, 2020 12:29p
P/E Ratio
19.28
Dividend Yield
2.10%
Market Cap
$26.90 billion
Rev. per Employee
$343,032
loading...
/zigman2/quotes/210414114/composite
US : U.S.: NYSE
$ 22.89
-0.35 -1.53%
Volume: 3.36M
Aug. 12, 2020 12:30p
P/E Ratio
45.05
Dividend Yield
0.00%
Market Cap
$3.67 billion
Rev. per Employee
$156,814
loading...
/zigman2/quotes/203902116/composite
US : U.S.: NYSE
$ 16.62
-0.28 -1.63%
Volume: 3.00M
Aug. 12, 2020 12:30p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$2.65 billion
Rev. per Employee
$214,324
loading...
/zigman2/quotes/201854387/composite
US : U.S.: NYSE
$ 6.84
-0.19 -2.70%
Volume: 11.78M
Aug. 12, 2020 12:30p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$2.18 billion
Rev. per Employee
$197,992
loading...
/zigman2/quotes/203434128/composite
US : U.S.: NYSE
$ 142.23
-0.30 -0.21%
Volume: 1.07M
Aug. 12, 2020 12:29p
P/E Ratio
19.04
Dividend Yield
2.90%
Market Cap
$77.18 billion
Rev. per Employee
$526,173
loading...
/zigman2/quotes/203047719/composite
US : U.S.: NYSE
$ 205.18
+8.72 +4.44%
Volume: 3.46M
Aug. 12, 2020 12:30p
P/E Ratio
13.46
Dividend Yield
1.27%
Market Cap
$51.47 billion
Rev. per Employee
$304,846
loading...
/zigman2/quotes/208962119/composite
US : U.S.: NYSE
$ 50.15
+0.38 +0.76%
Volume: 238,024
Aug. 12, 2020 12:29p
P/E Ratio
27.57
Dividend Yield
1.91%
Market Cap
$8.03 billion
Rev. per Employee
$195,577
loading...
/zigman2/quotes/202026558/composite
US : U.S.: NYSE Arca
$ 77.85
+0.45 +0.59%
Volume: 4.69M
Aug. 12, 2020 12:29p
loading...
/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 49.07
+0.88 +1.83%
Volume: 13.71M
Aug. 12, 2020 12:30p
P/E Ratio
9.03
Dividend Yield
2.69%
Market Cap
$204.95 billion
Rev. per Employee
$659,665
loading...
/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 81.74
+4.85 +6.32%
Volume: 48.58M
Aug. 12, 2020 12:30p
P/E Ratio
159.63
Dividend Yield
N/A
Market Cap
$90.26 billion
Rev. per Employee
$641,089
loading...
/zigman2/quotes/210598361/realtime
US : Nasdaq
2,221.55
+66.76 +3.10%
Volume: 110,335
Aug. 12, 2020 12:30p
loading...
/zigman2/quotes/201948298/composite
US : U.S.: NYSE
$ 255.03
+6.61 +2.66%
Volume: 5.75M
Aug. 12, 2020 12:29p
P/E Ratio
31.66
Dividend Yield
N/A
Market Cap
$675.69 billion
Rev. per Employee
$781,259
loading...
/zigman2/quotes/204905836/composite
US : U.S.: NYSE
$ 13.15
+0.15 +1.19%
Volume: 47.61M
Aug. 12, 2020 12:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$15.39 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205122565/composite
US : U.S.: Nasdaq
$ 63.22
+2.04 +3.33%
Volume: 3.71M
Aug. 12, 2020 12:30p
P/E Ratio
111.20
Dividend Yield
N/A
Market Cap
$96.40 billion
Rev. per Employee
$442,391
loading...
/zigman2/quotes/203657421/composite
US : U.S.: Nasdaq
$ 22.56
+0.45 +2.04%
Volume: 1.40M
Aug. 12, 2020 12:29p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$16.22 billion
Rev. per Employee
$440,305
loading...
/zigman2/quotes/208876581/composite
US : U.S.: Nasdaq
$ 90.34
+3.07 +3.52%
Volume: 2.39M
Aug. 12, 2020 12:29p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$104.52 billion
Rev. per Employee
$1.71M
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,381.73
+48.04 +1.44%
Volume: 1.04B
Aug. 12, 2020 12:30p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
11,021.39
+238.57 +2.21%
Volume: 1.85M
Aug. 12, 2020 12:30p
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Ciara Linnane is MarketWatch's investing- and corporate-news editor. She is based in New York.

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