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US STOCKS-S&P 500, Dow slip as trade-fuelled rally pauses

Reuters | Washington DC | Updated: 08-11-2019 22:38 IST | Created: 08-11-2019 22:30 IST
US STOCKS-S&P 500, Dow slip as trade-fuelled rally pauses
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The S&P 500 and Dow Jones indexes stalled on Friday after a record run, as U.S. President Donald Trump contradicted reports that the United States and China would roll back existing tariffs. However, the Nasdaq eked out gains on the back of a rise in shares of Facebook Inc and Microsoft Corp.

The benchmark S&P 500 and blue-chip Dow had closed at all-time highs on Thursday after officials said both countries had agreed to roll back tariffs on each others' goods in a "phase one" trade deal if it is completed. However, Trump said on Friday he had not agreed to roll back the tariffs, although Beijing would like him to do so. The news sent all the three major U.S. stock indexes sharply lower, but the S&P and Nasdaq quickly recovered to trade near flat.

"Let's not forget that in the past we have come so close to a trade agreement and at the last minute there has been a pullback," said Michael Geraghty, capital market strategist at Cornerstone Capital Group in New York. "The president is very set in his way and the Chinese have their viewpoint too, so it seems it's going to take a bit longer for the trade deal to be nailed down."

Seven of the 11 major S&P 500 sectors were trading lower, with the energy sector shedding 1.4% as oil prices fell. The financials sector was also lower as the benchmark U.S. 10-year Treasury yield came down from the three-month high hit on Thursday.

Still, the S&P 500 was on track for its fifth straight week of gains, while the Nasdaq was eyeing its sixth consecutive weekly rise, partly propelled by a rosy third-quarter earnings season. Walt Disney Co gained 4% as its popular theme parks and a remake of "The Lion King" lifted earnings, and the company also spent less than it had projected on its online streaming service, Disney+.

At 11:34 a.m. ET the Dow Jones Industrial Average was down 70.35 points, or 0.25%, at 27,604.45, the S&P 500 was down 1.95 points, or 0.06%, at 3,083.23. The Nasdaq Composite was up 10.05 points, or 0.12%, at 8,444.57. Dragging on the Dow were losses in shares of trade-sensitive industrials 3M Co and Boeing Co.

Among other stocks, Gap Inc fell 6.5% after it said Chief Executive Officer Art Peck would leave the company, a surprise exit in the middle of a restructuring. The apparel retailer also slashed its full-year earnings forecast. Energy drinks maker Monster Beverage Corp rose 3.7% after posting a better-than-expected third-quarter profit and announcing a $500 million share buyback plan.

Declining issues outnumbered advancers for a 1.12-to-1 ratio on the NYSE. Advancing issues outnumbered decliners for a 1.07-to-1 ratio on the Nasdaq. The S&P index recorded 17 new 52-week highs and two new lows, while the Nasdaq recorded 44 new highs and 65 new lows.

Also Read: US House approves procedure to impeach President Donald Trump


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