U.S. Stocks Slide as Investors Weigh Latest Trade Signals
December 10 2019 - 10:16AM
Dow Jones News
By Anna Isaac
U.S. stocks fell Tuesday, pressured by losses among shares of
banks and consumer staples firms and as investors weighed fresh
cues on the progress of the U.S.-China trade talks.
The Dow Jones Industrial Average fell 94 points, or 0.3%, to
27814 shortly after the opening bell. The S&P 500 lost 0.2% and
the Nasdaq Composite also declined 0.2%.
Tuesday's trading day started off quietly, even as a flurry of
news caught traders and analysts' attention. Stock futures had
initially climbed after The Wall Street Journal reported that U.S.
and Chinese trade negotiators were looking to delay fresh tariffs.
But then they erased some of their gains heading into the opening
bell after House Democrats announced two articles of impeachment
against President Trump related to allegations of abuse of power
and obstruction of Congress.
The U.S. and China are working toward postponing tariffs on $165
billion of Chinese goods that are set to kick in on Dec. 15,
according to officials on both sides. The world's two largest
economies are continuing to haggle over how to get Beijing to
commit to massive purchases of U.S. farm products, the people said.
President Trump is insisting on the commitments on agricultural
products before he strikes a so-called phase-one deal.
Chinese and U.S. officials involved in the talks say they don't
have a hard deadline for an initial deal, and officials on both
sides have signaled that Sunday isn't the final date. That deadline
could be extended, as has happened several times when the two sides
thought they were on the verge of a deal.
"A lot of different options are still on the table, we just
don't know what's going to happen," said Oliver Jones, market
economist at Capital Economics. "At one end of the spectrum there's
a deal and the tariffs roll back. But just last week we had Trump's
remarks that there might not be a deal until after the
election."
Meanwhile, U.S. lawmakers are taking aim at China with a new
bill that would bar the use of federal funds to buy Chinese buses
and railcars, congressional aides familiar with the matter told The
Wall Street Journal. That may complicate Mr. Trump's efforts to
reach an initial trade agreement, which would bring to a halt
tensions that have made markets jittery for much of the year.
In China, the government last year introduced a sweeping policy
to curtail its use of foreign technology products by awarding more
contracts to domestic suppliers, people familiar with the matter
said. The initiative, which hadn't been made public, may help China
double down on its efforts to decouple its technology sector from
the U.S.
Markets have been parsing such signals as they try to gauge the
potential outcome of the trade negotiations, though some investors
say a degree of fatigue has also set in.
"The outcome really does impact equity markets one way or
another, it impacts the earnings of big tech companies and
manufacturers," Mr. Jones said.
AutoZone shares rose 6.7% after the car-parts retailer's profit
beat estimates for the quarter..
Within European equities, Sanofi climbed in Paris after the
company said it would stop its research efforts in the challenging
field of diabetes, and offered a bullish forecast for its star drug
Dupixent.
The U.K.'s FTSE 100 index dropped 0.4%. Britain is preparing to
head to the polls Thursday for a crucial election.
Federal Reserve officials are poised to begin a two-day meeting
Tuesday, where they are expected to decide to hold steady on
interest rates as Friday's strong jobs report will likely reassure
policy makers about the strength of the economy.
Write to Anna Isaac at anna.isaac@wsj.com
(END) Dow Jones Newswires
December 10, 2019 10:01 ET (15:01 GMT)
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