Wall Street faces a flat period over anticipating trade negotiations


Devdiscourse News Desk | Manhattan | Updated: 06-03-2019 00:22 IST | Created: 06-03-2019 00:00 IST
Wall Street faces a flat period over anticipating trade negotiations
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U.S. stocks struggled for direction on Tuesday, as a lack of fresh cues on U.S.-China trade negotiations curbed investor appetite despite upbeat profit forecasts from retailers.

U.S. Secretary of State Mike Pompeo said President Donald Trump will reject any deal that was not perfect but added the United States will keep working on an agreement. Wall Street kicked off the day on a muted note after losing ground on Monday, when the S&P 500 failed to close above the 2,800-point mark for the second session in a row.

"People are looking at the trade talks and how that gets negotiated through and that's not something you can quantify so that is why you are sitting in a very tight range," said Matt Lloyd, chief investment officer, Advisors Asset Management in Monument, Colorado. "There is no outright move in markets. There is no reason to buy and there is no reason to sell so people are maintaining their cash positions."

The S&P 500 has climbed about 11 per cent in 2019 and is now about 5 per cent away from its Sept.20 record closing high, helped by a dovish stance from the Federal Reserve and on hopes, the United States and China would soon hammer out a trade solution. Target Corp jumped 4.93 per cent, while Kohl's Corp gained 7.01 per cent after the retailers forecast annual earnings above expectations.

Their upbeat results pushed the consumer discretionary 0.27 per cent higher, the most among S&P sectors. The retailing index rose 0.33 per cent. At 12:45 p.m. ET the Dow Jones Industrial Average was down 2.33 points, or 0.01 per cent, at 25,817.32, the S&P 500 was down 2.44 points, or 0.09 per cent, at 2,790.37 and the Nasdaq Composite was up 2.67 points, or 0.04 per cent, at 7,580.24.

Analysts now expect first-quarter earnings to fall 1.3 per cent year-over-year, compared with prior expectations of a 5.3 per cent rise at the start of the year, according to Refinitiv data. It will be the first drop in quarterly earnings growth since 2016. Seven of the 11 major S&P sectors were trading lower, with the financial sector's 0.52 per cent fall leading the losses.

The sector was weighed down by losses in Wall Street's big banks, with Citigroup Inc down 1.6 per cent and Wells Fargo & Co 0.9 per cent. Among other stocks, Align Technology Inc's tumbled 5.97 per cent, the most among S&P 500 companies, after the orthodontic device maker said it expects to take a charge in its current quarter.

On the macro front, ISM's non-manufacturing activity index showed a reading of 59.7 in February, better than estimates of 57.3, while another report showed new U.S. single-family homes rose to a seven-month high in December. Declining issues outnumbered advancers for a 1.22-to-1 ratio on the NYSE and for a 1.27-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and one new low, while the Nasdaq recorded 28 new highs and 25 new lows. 

(With inputs from agencies.)

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