FILE - In this Dec. 5, 2019, file photo specialist Christopher Riggs, left, works with traders Fred DeMarco, center and Philip Powers on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Tuesday, Dec. 10. (AP Photo/Richard Drew, File)

Stocks close lower on Wall Street ahead of tariff deadline

December 10, 2019 - 4:05 pm

NEW YORK (AP) — Stocks are closing slightly lower on Wall Street following reports that the U.S. may delay a new round of tariffs on Chinese goods . The tariffs are supposed to take effect Dec. 15, and they threaten to raise prices of cellphones, laptops and other popular products for U.S. shoppers. Major indexes flipped between small gains and losses throughout the day in muted trading. The S&P 500 fell 3 points, or 0.1%, to 3,132. The Dow Jones Industrial Average slipped 27 points, or 0.1%, to 27,881. The Nasdaq lost 5 points, or 0.1%, to 8,616. Bond prices fell, sending yields slightly higher.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Stocks held steady on Wall Street in afternoon trading Tuesday as investors considered reports that the U.S. will delay a new round of tariffs on Chinese goods.

The tariffs are supposed to take effect Dec. 15, and they threaten to raise prices of cellphones, laptops and other popular products for U.S. shoppers. Washington and Beijing have been working toward a limited “Phase 1” deal in advance of the tariffs starting, and Wall Street hopes it can lead to an eventual long-term resolution.

The S&P 500 flipped between small gains and losses through the day in muted trading. Technology stocks led the way, and Micron rose 2.9% while Nvidia climbed 1.1%. The sector is particularly sensitive to trade as many of the companies rely on China for sales and supply chains.

Health care stocks and utilities also rose. But losses for real-estate companies, raw-material producers and communications companies held the market in check. Comcast fell 2.2% and Netflix fell 2.6%.

KEEPING SCORE: The S&P 500 index was virtually flat for the day as of 3 p.m. Eastern time. The Dow Jones Industrial Average rose 48 points, less than 0.1%, to 27,918. The Nasdaq rose 0. 1 %. The Russell 2000 index of smaller company stocks rose 0.1%.

European and Asian markets were mixed.

TRADE WOES: Stocks have been swinging for months on every hint of progress in trade talks between Washington and Beijing . Negotiators have released few details, leaving investors to rely on statements from President Donald Trump and others on the status of a potential deal. Trump rattled the market last week when he said that a deal could possibly wait until after the 2020 elections. Media reports subsequently said that despite Trump’s rhetoric, the talks were making progress and China helped ease some of the tension when it said it would waive tariffs on American soybeans and pork, which have been hurting American farmers.

“The market does seem to be pricing in somewhat good news,” said Mike Dowdall, investment strategist at BMO Global Asset Management. “And by good news, I define that as tariffs not going into effect. But beyond that, it's quite unclear.”

The longstanding trade war has hurt manufacturing around the world and caused U.S. businesses to hold back on making investments. The saving grace for the economy has been a strong job market and consumer spending, and the economy grew at a 2.1% annual rate in the third quarter.

ANALYSTS' TAKE: Wall Street has been reacting to whether the U.S. and China make a deal, but it won't matter unless any deal is actually structured to last, said David Kelly, chief global strategist at JPMorgan Funds.

“The real issue is not the exact details or timing, but the durability," he said. “Multiple changes of direction on trade over the last few years means nobody can trust that what we're headed for here is a durable peace, rather it is a fragile cease-fire.”

IT'S NOT JUST CHINA: Democrats in the House of Representatives and the White House announced a revised trade deal with Mexico and Canada. The deal would replace the North American Free Trade Agreement and would offer more provisions for U.S. workers.

The deal offers optimism that a Capitol Hill nearly paralyzed by partisan viciousness can still find some bipartisan agreements. But investors aren't puttting too much stock into it. “This is more of a one-off,” said BMO Global Asset Management's Dowdall.

LATE EARNINGS LIFT: Earnings season is essentially over but several smaller companies are getting a lift from late reports. Online clothing styling service Stitch Fix surged 8.5%. Auto parts retailer AutoZone jumped 7% for the biggest gain in the S&P 500 after reporting stronger revenue and profit than analysts expected

YIELDS: Trading in the bond market was nearly as quiet as in the stock market. The yield on the 10-year Treasury yield held steady at 1.83%, the same level it was at late Monday.

AP Business Writer Stan Choe contributed.

AP Editorial Categories: 
Comments ()