By Sue Chang and Chris Matthews, MarketWatch

U.S. dollar gains as pound slips

Major U.S. benchmarks struggled for direction Monday as a round of U.S.-China tariff negotiations in Beijing commenced and as the threat of another partial government shutdown loomed.

How are major indexes faring?

The Dow Jones Industrial Average fell 58 points, 0.2%, to 25,048, while the S&P 500 was off less than a point to 2,707 after trading mostly higher earlier. The Nasdaq Composite Index rose 4 points to 7,302.

Need to Know: Weak hands may be signaling a 'major market decline,' fund manager warns (http://www.marketwatch.com/story/weak-hands-may-be-signalling-a-major-market-decline-fund-manager-warns-2019-02-11)

What's driving the market?

The latest round of trade negotiations between the U.S. and China will begin Monday with working-level talks while Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are due to arrive Thursday for more high-level discussions.

Even if tariffs on Chinese goods remain at 10% beyond next month's deadline, as some media reports have suggested, the lingering uncertainty around a trade resolution would only highlight that a 12-month long negotiation between the world's largest economies has failed to yield any tangible results.

That could further unsettle investors and U.S. corporations alike who are looking at a 12:01 a.m. Eastern Time March 2 deadline for an agreement to be struck between the two countries.

Investors are also preparing for another potential government closure after talks broke down between the main parties (http://www.marketwatch.com/story/border-security-negotiations-stall-as-another-shutdown-deadline-looms-2019-02-10) over whether to limit the number of migrants authorities can detain. The White House hasn't ruled out another shutdown if a border security compromise can't be reached by midnight Friday.

The U.K., meanwhile, is bracing for a March 29 scheduled exit from the European Union with or without a trade agreement in hand.

See:Why stock-market traders are already bracing for a make-or-break month in March (http://www.marketwatch.com/story/why-stock-market-traders-are-already-bracing-for-a-make-or-break-month-in-march-2019-02-09)

There are no economic data releases scheduled for Monday.

What are analysts saying?

Mat Klody, chief investment officer at Kleebeck Wealth Management, told MarketWatch that the major benchmarks' steady march higher since the beginning of the year is being driven "by the perception that the Fed has done a complete 180" in its apparent dovish turn, after raising rates four times last year.

But investors must now confront the fact that the Fed will likely only be able to refrain from further rate increases if global weakness abroad does, in fact, slow the U.S. economy, he said. "If in a few months we see China and Europe slowing further, that investing environment could be a lot choppier," he said.

"A lot of the good news out there is already priced into stocks at these levels," wrote Tom Essaye, president of the Sevens Report, in a Monday note to clients. "At 2,700 or higher, the S&P 500 isn't priced for perfection, but it is priced for positive resolution of numerous events," including the U.S.-China trade spat, a stabilization of global economic growth, and the Fed declining to raise rates at all in 2019, he said.

"It's not that good things aren't possible, it's that a lot of them are now assumed by the S&P 500 at 2,700 or higher, and that creates not much reward and more risk," Essaye wrote.

Which stocks are in focus?

Restaurant Brands International Inc. (QSR) shares rose 2% after the parent company of Burger King reported profit and same-store sales growth above Wall Street expectations.

Morgan Stanley (MS) shares fell 1% after the bank announced the acquisition (http://www.marketwatch.com/story/morgan-stanley-to-buy-canadas-solium-capital-for-900-million-in-cash-2019-02-11) of Canada-based Solium Capital Inc. in a deal valued at $900 million.

Shares of Electronic Arts Inc. (EA) came off earlier higher to rise 2.6%, building on Friday's momentum when it rose 16%, on news that the company's Apex Legends game logged more than 10 million players in its first 72 hours (http://www.marketwatch.com/story/ea-stock-jumps-after-company-says-apex-legends-hit-10-million-players-in-first-three-days-2019-02-08).

Shares of Tesla Inc.(TSLA) gained 2.8% after a Canaccord analyst upgraded the stock to buy (http://www.marketwatch.com/story/tesla-stock-jumps-4-as-canaccord-upgrades-and-predicts-a-more-stable-year-in-2019-2019-02-11) from hold and said the electric-vehicle story is underappreciated.

How are other markets trading?

In Asia (http://www.marketwatch.com/story/asian-markets-drop-on-renewed-worries-over-us-china-trade-talks-2019-02-07), the Shanghai Composite returned from a week of holiday to close up nearly 1.4%. Stocks in Europe were stronger across the board with the Stoxx Europe 600 up 0.9%.

Crude oil was under pressure (http://www.marketwatch.com/story/oil-prices-slip-as-us-rig-count-rises-again-2019-02-11), while gold settled lower (http://www.marketwatch.com/story/gold-eases-as-dollar-climbs-with-revived-trade-talks-holding-market-attention-2019-02-11) and the U.S. dollar rose against its peers (http://www.marketwatch.com/story/dollar-extends-climb-to-kick-off-week-with-partial-government-shutdown-looming-2019-02-11).

--Barbara Kollmeyer contributed to this report

(END) Dow Jones Newswires

February 11, 2019 14:45 ET (19:45 GMT)