Stocks Fizzle After Early Gains, Suffer 1st Loss in 6 Days

NEW YORK (AP) —

U.S. stocks fell Tuesday for the first time in six days after the recent upward momentum gave way to lingering concerns about the U.S. trade war with China.

Defense contractors suffered steep declines and technology stocks gave up most of their early gains, taking the steam out of a morning rally on Wall Street. The Dow Jones Industrial Average closed with a loss of 14 points after rising as many as 186 points after trading began.

The market had rallied for five straight days since the Federal Reserve signaled it is open to cutting interest rates if needed to stabilize the economy rattled by trade disputes. The gains had erased much of the S&P 500’s 6.6% decline in May. But Tuesday, concerns that the U.S. trade spat with China could be prolonged and hurt growth in the world’s two biggest economies dimmed investor enthusiasm.

President Donald Trump has said he plans to meet with Chinese President Xi Jinping at the Group of 20 summit late this month in Osaka, Japan. But Trump reiterated Tuesday that if the two can’t reach an agreement on trade, he’ll proceed with tariffs on $300 billion goods from China that aren’t already subject to import taxes.

Defense companies were the biggest decliners in the S&P 500. The market on Monday welcomed news of a megamerger between Raytheon and United Technologies, but the stocks dropped sharply Tuesday. Raytheon lost 5.1% and United Technologies shed 4%. L3 Technologies fell 4.4% and Harris Corp. dropped 4.3%. On Monday, Mr. Trump expressed reservations about the Raytheon-United Technologies tie-up.

Technology stocks also gave up some early gains. Adobe fell 1.6% and Advanced Micro Devices fell 2.5%. The tech sector is still up nearly 24% so far this year, the best performer among the 11 sectors in the S&P 500.

Consumer-focused stocks and internet companies were among the gainers. Facebook rose 1.9% and Verizon gained 1.2%. Walgreens rose 1.1% and Dollar Tree rose 2.7%.

The S&P 500 slipped 1.01 point, or 0.03%, to 2,885.72. The Dow fell 14.17 points, or 0.1%, to 26,048.51. The Nasdaq composite slipped 0.60 of a point to end at 7,822.57. The Russell 2000 index of small companies fell 4.45 points, or 0.3%, to 1,519.11.

The yield on the 10-year Treasury has dropped from around 2.50% in early May to 2.14% Tuesday.

Meanwhile, one of the market’s recent high-flyers had a rare bad day.

Beyond Meat fell 25% after J.P. Morgan’s Ken Goldman and James Allen downgraded the stock to “neutral.” The downgrade follows a surge in the stock price from $25 to $167 since the maker of plant-based meat alternatives started trading publicly on May 2. In a note to clients Tuesday, Goldman and Allen said the downgrade was “purely a valuation call.”

In other trading, energy futures finished mostly higher Tuesday. Benchmark U.S. crude rose 1 cent to $53.27 a barrel. Brent crude oil, the international standard, was unchanged at $62.29 a barrel.

Wholesale gasoline rose 1.7% to $1.76 per gallon. Heating oil rose to $1.82 per gallon. Natural gas added 1.7% to $2.40 per 1,000 cubic feet.

Gold rose 0.1% to $1,331.20 per ounce, silver rose 0.7% to $14.74 per ounce and copper gained 0.4% to $2.672 per pound.

The dollar rose to 108.50 Japanese yen from 108.44 yen on Friday. The euro weakened to $1.1332 from $1.1315

To Read The Full Story

Are you already a subscriber?
Click to log in!