Uncertainty Over U.S.-China Trade Talks Pushes Stocks Lower

stock report
Traders on the floor at the New York Stock Exchange pause for a moment of silence in honor of Veterans Day. (Reuters/Brendan McDermid)

Stocks are falling Monday on Wall Street as investors weigh mixed signals about the status of U.S. trade talks with China.

Late last week, Chinese officials said both sides agreed to roll back tariffs if the trade talks progressed. But Saturday, President Donald Trump said that reports on how far the U.S. is willing to go on rolling back tariffs were “incorrect.” Investors hope the world’s largest economies can make enough progress to avoid another round of tariffs scheduled to take effect next month.

Health-care companies led the decline. Johnson & Johnson fell 1%.

Banks also fell broadly. BB&T shed 1%.

Bond markets are closed for the Veterans Day holiday. The yield on the 10-year Treasury rose to 1.93% late Friday.

Technology stocks also fell. Qualcomm slipped 2%. The sector is sensitive to shifts in trade policy as many of the companies rely on China for their sales and supply chains.

Investors took more defensive positions. Real estate stocks held up better than the rest of the market. Companies in those sectors are considered safer investments when economic growth is threatened.

The market remains higher so far in the fourth quarter. Hopes for a trade deal, along with solid economic reports and corporate profits, have fueled a rally since early October.

The S&P 500 index has posted gains for five straight weeks. It reached a record high on Friday.

KEEPING SCORE: The S&P 500 index fell 0.3% as of 12:05 p.m. Eastern time. The Dow Jones Industrial Average fell 33 points, or 0.1%, to 27,649. The Nasdaq fell 0.3%. The Russell 2000 index of smaller company stocks fell 0.5%.

WEEK AHEAD: Investors will be closely watching any developments in U.S.-China trade talks this week as the latest corporate earnings season nears a close. Nearly 90% of the companies in the S&P 500 have reported results, according to FactSet.

This will be a relatively quiet week for economic data.

The Labor Department will report October data for the Consumer Price Index on Wednesday and for the Producer Price Index on Thursday. The Commerce Department will report retail sales data for October on Friday.

DEAL CHATTER: Walgreens Boots Alliance rose 5.9% after Bloomberg reported that private equity giant KKR is interested in buying the drugstore chain. Media reports have fueled speculation since last week about a potential Walgreens sale.

OVERSEAS: Asian markets fell. Hong Kong’s Hang Seng slid 2.6% as protests intensified. Uncertainty has risen in the city after more than five months of protests that began with a fight over an extradition bill that has expanded to include demands for greater democracy and police accountability.

China’s Shanghai Composite index declined 1.8%.

European markets also fell. Britain’s FTSE 100 index shed 1.2% after the pound struck a one-week high of $1.2880. U.K. stocks often move opposite to the pound as many companies listed on the index are international companies, so a higher currency could weigh on exports and reduce their earnings.

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