Stocks Sink on Fear of Trade Tensions

NEW YORK (AP) -- Stocks are sinking and bond prices are climbing as trade tensions between the U.S. and China rise. The Trump administration is expected to announce trade sanctions on China, while the government in Beijing said it will defend itself. Industrial and technology companies took some of the worst losses while banks dipped along with interest rates. Stock indexes in Europe and Asia also fell.

KEEPING SCORE: The S&P 500 index lost 18 points, or 0.6 percent, to 2,694 as of 10:14 a.m. Eastern time. The Dow Jones industrial average sank 172 points, or 0.7 percent, to 24,520. The Nasdaq composite gave up 45 points, or 0.6 percent, to 7,300. The Russell 2000 index of smaller-company stocks fared somewhat better but still lost 4 points, or 0.3 percent, to 1,574.

TRADE WORRIES: The administration is expected to announce restrictions on trade with China, including tariffs on as much as $60 billion worth of Chinese products as well as potential restrictions on Chinese investment. China's Commerce Ministry said the country will defend its interests. Earlier this month the Trump administration ordered tariffs on imported steel and aluminum and stocks dropped as investors worried about the possibility of tougher restrictions on international trade and smaller profits for corporations. Their fears eased when the administration said some countries will be exempt from the tariffs.

Among technology companies, Micron Technology fell $1.15, or 1.9 percent, to $59.91 and Alphabet, Google's parent company, fell $16.91, or 1.5 percent, to $1,077.09. Industrial companies have also been hit by worries about trade, as they face a combination of higher prices for imported metals that they use to make their machinery and potential restrictions on sales overseas. Construction equipment maker Caterpillar fell $2.59, or 1.7 percent, to $153.21 and aerospace company Boeing slid $6.49, or 1.9 percent, to $330.61.

OVERSEAS REACTION: Britain's FTSE 100 dropped 1.4 percent and Germany's DAX lost 1.8 percent. The CAC 40 in France shed 1.7 percent. Hong Kong's Hang Seng dropped 1.1 percent. The Nikkei 225 in Japan index gained 1 percent and the South Korean Kospi added 0.4 percent.

BONDS: Bond prices climbed. The yield on the 10-year Treasury note slipped to 2.83 percent from 2.88 percent late Wednesday. When yields and interest rate decrease, banks make smaller profits on loans. Bank of America lost 78 cents, or 2.4 percent, to $31.09 and JPMorgan Chase gave up $1.66, or 1.4 percent, to $113.08.

Utility companies moved higher. When bond yields decline, investors often buy utilities, real estate investment trusts, and other stocks that pay big dividends.

The decline in rates comes a day after the Federal Reserve raised interest rates and said the U.S. economy and the job market continued to improve over the last two months. The Fed expects to raise rates three times this year, although some investors think a fourth increase is possible. The Fed also said it might raise rates three more times next year instead of two.

ABBVIE TUMBLES: AbbVie plunged after it reported disappointing results from a study of its cancer therapy Rova-T. AbbVie canceled its plans to ask for faster approval of Rova-T as a treatment for small cell lung cancer, but other studies are continuing. AbbVie shed $12.19, or 10.8 percent, to $110.26. Other health care stocks also sank. Johnson & Johnson fell $1.24 to $129.95 and Amgen declined $1.94, or 1.1 percent, to $179.65.

ENERGY: Benchmark U.S. crude shed 58 cents to $64.59 a barrel in New York. Brent crude, used to price international oils, lost 66 cents, or 1.1 percent, to $68.30 a barrel in London.

CURRENCIES: The dollar fell to 105.48 yen from 106.10 yen. The euro rose to $1.2311 from $1.2332.