Stocks ended Tuesday strong as investors reacted to heated trade rhetoric between the US and China for another day.
The Dow Jones Industrial Average ended 473 points, or 1.79% to 25,965, after having previously dropped as much as 648 points. It was the index's first down below 26,000 since March 29. S & P 500 fell 1.65% and Nasdaq fell 1.96%.
U.S. Trade representative Robert Lighthizer complained of "an erosion in China's commitments" and said that $ 200 billion in Chinese imports would rise to 25% from Friday. Lighthizer comments followed threatening tweets from President Donald Trump who rattled markets on Monday.
"The mood on Wall Street is unfortunate because increased trade tensions between the US and China have taken hold of traders," said David Madden, market analyst at CMC Markets UK. "For several months, we've had some good positive news about the trade negotiations, and it pushed US indices such as the S&P 500 and the Nasdaq-1
All 30 shares in Dow were trading to the disadvantage. Leading to the Dow lower was Boeing (BA – Get Report), which fell 3.8% to $ 357.40 after analysts in Barclays downgraded their aviation giant rating to overweight, and said they expected the recovery of 737 MAX. production would take longer than expected. The troubled aircraft has been grounded after two fatalities that killed a total of 346 people.
"Trade war concerns have ebbed and flowed in the last eighteen months, that part is not new," said Putri Pascualy, CEO of PAAMCO. "What is new is market reaction. In the past, investors wanted to trade risk, suggesting growth as a cause of bullishness. Today, the risk factors are not being pulled off so easily. The risk asset matrix matrix for several asset classes has changed."
"While a decline of 500 points or more may be slightly buoyant, it is important to remember that we are only talking about a few percentage points, which is a very normal feature of the market," said Mike Loewengart, director of investment strategy at E * Trade Financial Corp. "Ebbs and streams are natural and should not let investors react emotionally. We've had a heck of a bullish ride so far this year, so it makes sense that the bear out there would lock on the negative trading that comes out of the oval office. "
Anadarko (APC – Get Report) rose slightly to $ 75.81 after Woodlands, Texas-based company board, approved a $ 38 billion offer from the OXY Overtime – Get Report) over a competing offer from C hevron ( CVX – Get Report and it agreed to sell some of its African assets to France's Total (TOT – Get Report). Occidental shares increased by 1.5% to $ 59.65, while Chevron dropped slightly to $ 118.25
Allergan (Get Report) shares dropped 4.3% to $ 141.34, although the Dublin-based pharmaceutical company beat Wall Street's first-quarter profit forecast.  Walt Disney shares (DIS – Get Report) dropped 1.13% to $ 133.48, although BMO analyst Daniel Salmon increased the target price of the entertainment company to $ 170 from $ 140 and kept its outperformance ahead of other quarterly results in Disney to be released on Wednesday.  The shares of the American International Group (AIG – Get Report) increased by 6.8% to $ 50.30 after the insurance company beat Wall Street's first quarter earnings forecasts.
In economic news, the number of jobs expected to be filled by 346,000 increased to 7.49 million, from an upgraded 7.14 million last month, according to the Ministry of Labor's work and labor turnover survey.
Anadarko and Disney are holdings in Jim Cramer's charitable trust. Click here for a free 14-day trial of Jim's Action Alert PLUS Investor Club.