Wall Street inches lower after string of gains
NEW YORK: U.S. stocks edged lower in late afternoon trading on Tuesday, as investors paused following a run of gains tied to optimism over easing trade tensions and the prospect of an interest rate cut by the Federal Reserve.
Industrials and utilities indexes led the way lower, while a decline in technology stocks, including Microsoft Corp and Adobe Inc, added pressure.
Investors may be reluctant to push stocks higher without a fresh catalyst for support, some strategists said.
Early enthusiasm for stocks was mostly “follow-through from some of the news from yesterday,” said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago. There’s “not much else to latch onto.
“My only concern is it’s a news-driven market right now, so all of that is subject to change,” Ablin added. “It’s not a trending catalyst.”
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.
The S&P 500 industrial index fell 0.9per cent, weighed down by losses in United Technologies Corp and Raytheon Co.
United Technologies fell 3.9per cent and Raytheon shed 4.9per cent, a day after President Donald Trump gave mixed signals on whether he believed the US$121 billion merger between the companies should go forward. On Monday, Raytheon had edged higher while United Technologies lost 3.1per cent.
The S&P utilities index on Tuesday was down 1per cent.
Optimism over Trump’s decision late on Friday to hold off import tariffs on Mexico drove Wall Street up on Monday, even though the United States warned it would impose tariffs if its demands were not satisfied.
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Separately, Trump said Tuesday that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees again to four or five “major points,” which Trump did not specify.
The Dow Jones Industrial Average fell 41.26 points, or 0.16per cent, to 26,021.42, the S&P 500 lost 3.75 points, or 0.13per cent, to 2,882.98 and the Nasdaq Composite dropped 9.36 points, or 0.12per cent, to 7,813.81.
The benchmark S&P 500 is now just about 2.1per cent away from its early May all-time high.
Meanwhile, 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.
Symantec Corp fell after Morgan Stanley downgraded the antivirus software maker’s stock, citing increased competition.
Declining issues outnumbered advancing ones on the NYSE by a 1.01-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.
The S&P 500 posted 49 new 52-week highs and three new lows; the Nasdaq Composite recorded 52 new highs and 81 new lows.
(Reporting by Caroline Valetkevitch; Additional reporting by Aparajita Saxena and Shreyashi Sanyal in Bengaluru; Editing by Leslie Adler)