Stocks

Wall Street dips as investors await outcome of US-China trade talks

Reuters NEW YORK | Updated on May 10, 2019 Published on May 10, 2019

Indexes down: Dow 0.54 per cent, S&P 0.30 per cent, Nasdaq 0.41 per cent

Wall Street's main indexes fell on Thursday ahead of critical trade negotiations between the United States and China, though they pared losses significantly after U.S. President Donald Trump said reaching a deal this week was possible.

U.S. stocks had fallen more than 1% earlier in the session but recovered much of those losses after Trump said he had received a “beautiful letter” from Chinese President Xi Jinping. Negotiators will meet at 5 p.m. EDT (2100 GMT) on Thursday, Trump said. They are set to continue talks through Friday.

Still, the United States has not backed down from hiking tariffs on $200 billion worth of Chinese goods to 25 per cent on Friday. Trump also said that paperwork had been initiated to levy 25 per cent tariffs on a further $325 billion worth of Chinese goods.

Even with the possibility of further tariffs going into effect, some investors remained optimistic that a trade agreement was within reach. That likely kept Thursday's declines in check, said John Stoltzfus, chief investment strategist at Oppenheimer Asset Management.

“We may very well see tariffs put in place tomorrow, but it's going to get resolved,” Stoltzfus said. “It's too impractical for either side to extend this into a protracted trade war.”

The Dow Jones Industrial Average fell 138.97 points, or 0.54 per cent, to 25,828.36, the S&P 500 lost 8.7 points, or 0.30 per cent, to 2,870.72 and the Nasdaq Composite dropped 32.73 points, or 0.41 per cent, to 7,910.59.

The CBOE Volatility Index, a gauge of investor anxiety, rose for the fourth consecutive session and is at its highest level in more than three months.

Declining issues outnumbered advancing ones on the NYSE by a 1.55-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored decliners.

The S&P 500 posted two new 52-week highs and 11 new lows; the Nasdaq Composite recorded 37 new highs and 98 new lows.

Volume on U.S. exchanges was 7.75 billion shares, compared with the 6.83 billion-share average for the full session over the last 20 trading days.

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Published on May 10, 2019
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