NEW YORK (AP) — U.S. stocks are sinking Wednesday as investors react to the departure of Gary Cohn, the top economic adviser to President Donald Trump. Wall Street liked Cohn, a former top executive at Goldman Sachs who opposed the administration's planned tariffs on imports of steel and aluminum. His departure could be a sign more protectionist policies are on the way.
Industrial companies like Caterpillar and Boeing are taking some of the worst losses. Retailers are sinking after weak results and a disappointing annual forecast from discount chain Dollar Tree and energy companies are falling with oil prices.
KEEPING SCORE: The Standard & Poor's 500 index fell 22 points, or 0.8 percent, to 2,705 as of 12:20 p.m. The Dow Jones industrial average declined 302 points, or 1.2 percent, to 24,582. The Nasdaq composite slid 37 points, or 0.4 percent, to 7,334.
The Russell 2000 index of smaller-company stocks was unchanged at 1,562. It's fared better than the S&P and Dow over the last week as the companies on that index are far more U.S.-focused and would stand to lose less from a flare-up in global trade tensions.
TRADE: Cohn, the director of the National Economic Council, was known to oppose the tariff plan, which has also drawn criticism from Republicans in Congress. Trump has been resisting calls to reverse his stance. The European Union, meanwhile, said it was finalizing a list of U.S. products that it could hit with tariffs in retaliation, should that be required.
"He was seen as a key proponent of free trade to balance some of the other more protectionist-type advisers in the administration," said Keith Parker, U.S. Equity Strategist for UBS.
Industrial companies face the prospect of both greater expenses due to higher metals costs and restricted sales overseas if other nations respond with tariffs on U.S. goods.
Aerospace company Boeing lost $6.06, or 1.7 percent, to $342.86 and construction equipment maker Caterpillar gave up $4.20, or 2.7 percent, to $149.55. Farm equipment maker Deere shed $2.88, or 1.8 percent, to $155.63. Harley-Davidson, which faces potential EU tariffs on motorcycles, slid 78 cents, or 1.8 percent, to $43.55.
THE QUOTE: Parker said the tariffs could reduce corporate profits by about $10 billion. While that might have a substantial impact on certain companies, he said it's far smaller than the boost corporations will get from the tax cut that was signed into law in December. A greater concern is that the administration will take protectionist steps against China, raising the cost of items including phones, technology goods, and clothing.
"The risk is that given China policy and actions that there could be something specific placed on Chinese goods, which would potentially lead to a retaliatory action," he said.
While most investors interpreted the departure of Cohn as a loss, Parker said his resignation might keep some of the administration's protectionist plans in check when combined with criticism from Republicans in Congress and the generally negative stock market reaction.
DOLLAR TREE STUMPED: Discount retailer Dollar Tree's fourth quarter results disappointed investors, and so did its forecasts for the current year. It tumbled $16.28, or 15.6 percent, to $88.08.
Competitor Ross Stores lost $4.24, or 5.3 percent, to $76.27 following its report, and Dollar General fell $3.68, or 3.9 percent, to $89.76. Other companies that make and sell consumer goods and household products were generally lower. Newell Brands skidded 72 cents, or 2.6 percent, to $27.17. Grocery store Kroger shed $1.23, or 4.4 percent, to $26.79 and Jack Daniel's maker Brown-Forman sank $2.67, or 4.8 percent, to $53.37.
OIL: Benchmark U.S. crude dropped $1.57, or 2.5 percent, to $61.03 a barrel in New York after the Energy Department reported that U.S. oil production rose last week. Brent crude, used to price international oils, fell $1.54, or 2.3 percent, to $64.25 a barrel in London. Exxon Mobil tumbled $2.34, or 3.1 percent, to $73.84 and Hess lost $2.21, or 4.6 percent, to $46.27.
ECONOMY: Private U.S. employers added 235,000 jobs in February, according to ADP. The government will release its own jobs report Friday, and investors will be keeping a close eye on wage growth. Stocks plunged a month ago after the jobs report for January showed strong growth in hourly wages, a possible sign of greater inflation.
BONDS: Bond prices edged higher. The yield on the 10-year Treasury note fell to 2.85 percent from 2.89 percent.
OVERSEAS: Germany's DAX rose 1.1 percent and Britain's FTSE 100 gained 0.2 percent while the French CAC 40 added 0.3 percent. Asian markets started flat but losses widened in the afternoon. Japan's Nikkei 225 dropped 0.8 percent while South Korea's Kospi fell 0.4 percent. Hong Kong's Hang Seng index sank 1 percent.
CURRENCIES: The dollar dipped to 105.90 yen from 106.21 yen. The euro edged down to $1.2401 from $1.2405.