Wall St dips after Trump cancels North Korea summit; Netflix gains

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NEW YORK (REUTERS) - US stocks ended down slightly on Thursday (May 24) after President Donald Trump cancelled a planned summit with North Korea's Kim Jong Un and threatened to impose tariffs on auto imports, though losses were limited by gains in Netflix and General Electric.

Trump's order on Wednesday for an investigation into whether vehicle and auto part imports had damaged the US auto industry could further complicate trade negotiations with China and other trading partners.

Early on Thursday, Trump cancelled 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.

But stocks recouped much of the day's losses by the end of the session, and market participants said the sharp drop after the summit was cancelled 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, with the S&P energy index ending down 1.7 per cent. On the flip side, General Electric rose 3 per cent, rebounding from the previous session's losses, and Netflix's stock gained 1.3 per cent, both helping the market.

Netflix's stock market value ballooned to a record US$153 billion (S$205 billion) and eclipsed Walt Disney for the first time, making it the world's most valuable entertainment company.

The Dow Jones Industrial Average fell 75.05 points, or 0.3 per cent, to 24,811.76, the S&P 500 lost 5.53 points, or 0.2 per cent, to 2,727.76 and the Nasdaq Composite dropped 1.53 points, or 0.02 per cent, to 7,424.43.

Defence stocks jumped after Trump called off the North Korea meeting and warned the US military was ready in the event of any "reckless" acts by North Korea.

Ford and General Motors also gained on the possibility of tariffs on European and Asian car imports. US-listed shares of Fiat Chrysler Automobiles fell 0.9 per cent.

Declining issues outnumbered advancing ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favoured decliners.

The S&P 500 posted 21 new 52-week highs and one new low; the Nasdaq Composite recorded 106 new highs and 44 new lows.

About 6.3 billion shares changed hands on US exchanges. That compared with the 6.6 billion-share daily average for the past 20 trading days, according to Thomson Reuters data.

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