Wall Street drops as Trump cancels North Korea meet, adds to tariff fears

By Medha Singh

(Reuters) - U.S. stocks dropped on Thursday after President Donald Trump canceled a planned summit with North Korean leader Kim Jong Un, while a slide in oil prices and bank stocks also weighed as investors grappled with fresh U.S. protectionist plans.

Trump said he canceled a June 12 summit "based on the tremendous anger and open hostility" in Kim's recent statement.

The move came after North Korean media reported earlier that the country had blown up tunnels at its nuclear test site, which had raised the possibility of the summit.

Trump on Wednesday ordered a national security probe into car and truck imports that could lead to new tariffs, with China calling the move an "abuse" of the clauses and saying it would defend its interests.

The decision added to jitters over the prospects of trade negotiations with China, reignited after Trump called for "a different structure" to any trade deal.

"The markets are adjusting now with lots of uncertainties, with China, North Korea, (and the prospect of) a trade war that could spill over to other parts of the economy and the world," said Adam Sarhan, chief executive of 50 Park Investments in New York.

At 10:03 a.m. EDT the Dow Jones Industrial Average was down 129.77 points, or 0.52 percent, at 24,757.04, the S&P 500 was down 13.55 points, or 0.50 percent, at 2,719.74 and the Nasdaq Composite was down 31.17 points, or 0.42 percent, at 7,394.79.

Nine of the 11 major S&P sectors were in the red, with the technology sector's 0.5 percent decline weighing the most. The decline accelerated after the North Korea-U.S. summit cancellation.

Shares of European and Asian automakers skidded on the possibility of import tariffs, while U.S. automakers gained.

Ford was up 1.3 percent and General Motors gained 0.8 percent. U.S.-listed shares of Fiat fell 2.3 percent, while those of Ferrari dipped 0.6 percent.

Energy stocks declined as oil prices recorded their largest one-day drop in two weeks on rising expectations that OPEC could wind down an output deal that has been in place since the start of 2017 due to concerns about supplies from Venezuela and Iran.

Financials stocks dropped after the minutes from the Federal Reserve's latest meeting tempered expectations of faster interest rate hikes.

Best Buy Co tumbled 6.3 percent as investors focused on slowing online sales growth over the better-than-expected quarterly comparable sales.

Declining issues outnumbered advancers for a 1.81-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.89-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and no new lows, while the Nasdaq recorded 48 new highs and 23 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)