Wall Street Lower After China "Trade Fight"

NEW YORK (Reuters) – Wall Street slipped on Monday as a decision by the United States to impose special duties on Chinese tires sparked concerns about a possible trade dispute.

The decision by U.S. President Barack Obama could open the door to a host of trade complaints against Chinese products, creating tensions as Western nations seek support from the world’s third-largest economy at G20 meetings later this month.

In response, China’s commerce ministry said Sunday it launched an anti-dumping investigation into imports of U.S. chicken products and auto parts exporters. For details, see

“We’ve had a pretty good streak here of absolutely not one piece of negative news, and so this tire thing is probably the first,” said Stephen Massocca, managing director, Wedbush Morgan in San Francisco.

“(The market) was kind of due for a dinging, a little on the overbought side here, so it’s only natural for a pullback to take place.”

The Dow Jones industrial average .DJI dropped 40.35 points, or 0.42 percent, to 9,565.06. The Standard & Poor’s 500 Index .SPX fell 4.04 points, or 0.39 percent, to 1,038.69. The Nasdaq Composite Index .IXIC shed 5.86 points, or 0.28 percent, to 2,075.04.

Investors are increasingly wary of stock valuations as the current rally has extended into a sixth month with the S&P 500 up 53 percent since the March 9 low.

On the merger-and-acquisition front, Sprint Nextel Corp (S.N) shares jumped 10 percent to $4.14 after Britain’s Sunday Times newspaper reported that Germany’s Deutsche Telekom AG (DTEGn.DE) was considering a bid for its U.S. rival.