NEW YORK (Reuters) – U.S. stocks gave up early gains on Tuesday, with the Dow and S&P 500 moving into negative territory, as the likelihood of a protracted trade war between the United States and China kept investor enthusiasm for stocks in check.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 20, 2019. REUTERS/Brendan McDermid
U.S. President Donald Trump on Monday said he was “not yet ready” to make a deal with China, although he expected one could be reached in the future. An expanding tariff battle between the two sides has raised concerns the trade war would lead to a global economic slowdown.
“The market is trying to keep this momentum going but there is a lack of upside catalysts and there still are and I don’t know what is going to drive this higher,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“Any time the buyers step in, the excitement just kind of wears off and fizzles by the end of the day, and we’re seeing that again today.”
The uncertainty has pushed investors toward safe-haven assets, which resulted in benchmark 10-year U.S. Treasury yields dropping to their lowest since October 2017, while the spread between the 10-year and 3-month bills narrowed to nearly a 12-year low.
The majority of S&P sectors were in the red, with only communication services on the plus side.
The benchmark S&P 500 index as of Friday’s close was about 4% away from a record high reached on May 1, while the blue-chip Dow Jones Industrial index declined for a fifth straight week, its longest weekly losing streak in eight years.
The tech sector, which is down about 7% this month, also gave up early gains and turned negative despite a boost from a 4.98% jump in Total System Services Inc.
Global Payments Inc said it would buy the payment technology company for about $21.5 billion in stock. Its shares declined 2.99%.
In addition, Advanced Micro Devices shares surged 10.45% after the company unveiled new chips to battle for market shares with Intel, which fell 2.50%.
The Dow Jones Industrial Average dropped 91.86 points, or 0.36%, to 25,493.83, the S&P 500 lost 11.53 points, or 0.41%, to 2,814.53 and the Nasdaq Composite declined 8.08 points, or 0.11%, to 7,628.93.
Among other stocks, Activision Blizzard Inc rose 2.53% after Goldman Sachs upgraded its shares to “buy” and said the videogame publisher would benefit from its recent releases.
FedEx Corp slipped 0.59% after Huawei Technologies Co Ltd said it is reviewing its relationship with the U.S. package delivery company, after it diverted two parcels destined for Huawei addresses in Asia to the United States.
Declining issues outnumbered advancing ones on the NYSE by a 1.46-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.
The S&P 500 sported 17 new 52-week highs and 14 new lows; the Nasdaq Composite had 52 new highs and 103 new lows.
Reporting by Chuck Mikolajczak; Editing by Steve Orlofsky