FILE - In this Nov. 20, 2018 file photo, a U.S. flag flies outside New York Stock Exchange. Stocks fell in early trading on Wall Street Thursday, Nov. 21, 2019, as investors worry that the U.S. and China will fail to make a trade deal before the year is over. (AP Photo/Mary Altaffer, File )

Stocks edge lower on Wall Street over China trade anxiety

November 21, 2019 - 2:18 pm

Stocks edged lower on Wall Street in afternoon trading Thursday, placing the market on track for its third straight drop.

Losses in technology stocks and companies that rely on consumer spending outweighed gains in the energy, health care and financial sectors.

Investors have turned cautious this week amid concerns that the U.S. and China will fail to make a trade deal before the year is over.

The world’s largest economies have been negotiating a resolution to their trade war ahead of new tariffs set to hit key consumer goods on Dec. 15.

Investors have been hoping for a deal before that happens. The tariffs would increase prices on smartphones, laptops and many common household goods.

China’s Commerce Ministry batted away rumors that the talks were in trouble. A ministry spokesman said Beijing was committed to continuing discussions on core concerns. The Wall Street Journal is also reporting that China’s chief negotiator has called for more face-to-face negotiations.

Optimism that Washington and Beijing were nearing a “phase one” trade deal helped pave the way for gains in the market in recent weeks, including a string of all-time highs for the major stock indexes. Stocks have receded from those highs the past few days as investors have grown more doubtful about a trade resolution. The selling has the S&P 500 on track for its first weekly loss after six straight weeks of gains.

Technology stocks were the biggest losers Thursday. Many chipmakers and companies that make hardware rely on China for sales and supply chains. Advanced Micro Devices slid 3.7% and Lam Research fell 3.6%.

Consumer product makers also fell broadly. Kraft Heinz dropped 1.9%.

The price of U.S. crude oil climbed 2.5%, giving energy stocks a lift. Exxon Mobil rose 1.9%.

Bond prices fell. The yield on the 10-year Treasury rose to 1.78% from 1.74% late Wednesday. The rise in bond yields, which drive up the interest rates banks charge for mortgages and other loans, helped boost financial sector stocks. JPMorgan Chase added 0.6%.

KEEPING SCORE: The S&P 500 index was down 0.1% as of 2:12 p.m. Eastern time. The Dow Jones Industrial Average fell 16 points, or 0.1%, to 27,804. The Nasdaq dropped 0.2%. The Russell 2000 index of smaller company stocks lost 0.4%.

Major stock indexes in Europe finished lower.

ANALYST’S TAKE: The market will remain choppy and risky as long as the trade war and threat of new tariffs looms over Wall Street, said Barry Bannister, head of institutional equity strategy at Stifel.

“We don’t want to see tariffs on consumer goods that get passed on directly to retail purchasers because they’re the last leg on which the economy is standing right now,” Bannister said.

Bannister warned that the market could be in for a significant decline before the end of the year if the U.S. and China can’t make progress. He also said the risk of a larger recession has not disappeared.

DEALS OF THE DAY: Tiffany jumped 2.4% following a report that LVMH would raise its bid for the company. TD Ameritrade soared 18.1% after a report that Charles Schwab was in talks to acquire it.

PayPal slipped 1.3% after saying it would buy Honey Science, which helps people find coupons and discounts while they shop online.

MIXED SHOPPING BAG: Retailers continued to report a mixed batch of earnings. Macy’s fell 1.7% after cutting its profit and sales forecast. Investors rewarded Victoria’s Secret owner L Brands with a 9.7% gain after the company met Wall Street’s profit expectations.

Several other well-known retailers will report earnings later Thursday, including Nordstrom and Gap.

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