NEW YORK (AP) - U.S. stocks tumbled on Wall Street Friday after the U.S. announced plans to expand its trade war to Mexico.
The slump all but guarantees that May will be the first monthly loss for the market in 2019.
The new front in the trade war is hitting automakers particularly hard. Many of them import vehicles into the U.S. From Mexico.
Technology stocks led the decliners. They have been hurt the most over escalating rhetoric and tariffs in the U.S. trade war with China. Cisco fell 2.2 % and Apple fell 1.2%.
Banks were among the sharpest decliners as higher bond prices pushed yields lower. Investors have been shifting more money into bonds over concerns that economic growth will be crimped by the ongoing trade war. Lower bond yields make loans less profitable for banks. Citigroup fell 2% and Bank of America fell 1.7%.
Energy companies are sinking under the weight of falling oil prices. The price of crude oil slid 3%. Chevron fell 1% and Valero Energy fell 3.6%.
Utilities eked out gains. The sector is considered less risky by investors and a safer haven for money when economic growth seems threatened.
Investors have been fleeing to safer holdings all month. The shift to utilities and bonds quickened earlier in May after the U.S. and China broke off negotiations. The U.S. then pushed more tariffs on Chinese goods along with a ban on technology sales. That prompted retaliatory tariffs from China and threats over other key resources.
A smattering of late season earnings reports are also helping to move certain stocks. Williams-Sonoma rose on a solid first quarter financial report while retailer Gap plunged on weak results.
KEEPING SCORE: The S&P 500 index fell 1.3% as of 10:12 a.m. The Dow Jones Industrial Average fell 308 points, or 1.2%, to 24,860. The Nasdaq fell 1.4%.
TRADE WAR WOES: The new front in the U.S. trade war will have a wide impact on companies making everything from cars to tacos.
General Motors fell 4.3%, Ford shed 2.9% and Fiat Chrysler fell 4.2%. Those companies import vehicles from Mexico to the U.S.
Railroad operators are also getting squeezed. Kansas City Southern fell 6.9%. The company gets almost half its revenue from Mexico each year. Union Pacific also shed 2.3%.
Even Chipotle fell 2.5%. Rising avocado prices could hurt the Mexican restaurant chain.
STUCK IN A GAP: Clothing and apparel retailer Gap plunged 14.9% after the company gave investors a weak earnings report and slashed its full-year profit forecast.
The disappointing results and estimates come three months after the retailer said it was creating two independent publicly traded companies: low-priced juggernaut Old Navy and a yet-to-be named company that will hold the iconic Gap brand and Banana Republic, as well as the lesser known names Athleta, Intermix and Hill City.
Overall sales and sales at established stores fell during the quarter. Sales at its namesake Gap stores plunged 10%.
"This quarter was extremely challenging, and we are not at all satisfied with our results," said Art Peck, president and CEO of Gap in a statement.
CUSHY RESULTS: Williams-Sonoma rose 10.4% after the seller of cookware and home furnishings reported surprisingly strong first quarter financial results and raised its profit forecast for the year.
The company also attracted a surge of customers to its stores during the quarter. Sales at established stores rose 3.5%, blowing away Wall Street forecasts of a 1.6% increase.