Wall Street treads water after recent rally
|reuters.com 11 Jun 2019 at 13:44|
NEW YORK (Reuters) - U.S. stocks ended near flat and the Dow snapped a six-day winning streak on Tuesday, as investors paused following a run of gains and fresh worries emerged over the U.S. trade war with China.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 3, 2019. REUTERS/Brendan McDermid
President Donald Trump said Tuesday he was holding up a trade deal with China and had no interest in moving ahead, unless Beijing agrees to four or five “major points” which he did not specify.
Separately, Trump said he would impose more tariffs on Chinese imports if there was no progress in talks with Chinese President Xi Jinping at the Group of 20 summit later this month.
Stocks were mostly higher in early trading amid lingering optimism over Trump’s decision late on Friday to hold off import tariffs on Mexico.
“Trade sentiment is driving everything,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
“What we’re seeing today is the more pessimistic view on what might happen by the end of the month. Most selling in the month of May could be put down to China and Mexico.”
Investors also may be reluctant to push stocks higher without a fresh catalyst for support, some strategists said.
Data showed U.S. producer prices increased solidly for a second straight month in May, in line with expectations of economists polled by Reuters, pointing to a steady pickup in underlying inflation pressures.
Industrials and utilities indexes led the way lower Tuesday, with the S&P 500 industrial index falling 0.9%, weighed down by losses in United Technologies Corp and Raytheon Co.
The Dow Jones Industrial Average fell 14.17 points, or 0.05%, to 26,048.51, the S&P 500 lost 1.01 points, or 0.03%, to 2,885.72 and the Nasdaq Composite dropped 0.60 points, or 0.01%, to 7,822.57.
Recent optimism over trade tensions and the prospect of an interest rate cut by the Federal Reserve had helped stocks rally in recent sessions. The benchmark S&P 500 is just 2% away from its early May all-time high.
The market is betting the Fed will cut interest rates in July and cut two more times this year as Trump’s hard bargaining on trade with Beijing and others could push the economy back into recession.
United Technologies fell 4% and Raytheon shed 5.1%, a day after Trump gave mixed signals on whether he believed the $121 billion merger between the companies should go forward. On Monday, Raytheon edged higher while United Technologies lost 3.1%.
The S&P utilities index on Tuesday was down 0.7%.
Symantec Corp fell after Morgan Stanley downgraded the antivirus software maker’s stock, citing increased competition.
Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored decliners.
The S&P 500 posted 53 new 52-week highs and three new lows; the Nasdaq Composite recorded 54 new highs and 88 new lows.
Volume on U.S. exchanges was 6.76 billion shares, compared to about 6.92 billion average for the full session over the last 20 trading days.
Reporting by Caroline Valetkevitch; Additional reporting by Sinead Carew in New York and Aparajita Saxena and Shreyashi Sanyal in Bengaluru; Editing by Leslie Adler and Tom Brown