Stocks Edge Lower on Wall Street Over China Trade Anxiety

Stocks fell in afternoon trading on Wall Street Thursday as investors worry 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.

Technology stocks were the biggest losers. Many chipmakers and companies that make hardware rely on China for sales and supply chains.

Consumer product makers also fell broadly. Kraft Heinz fell 1.8%.

Rising oil prices helped lift energy stocks. Exxon Mobil rose 1.4%.

Bond prices fell. The yield on the 10-year Treasury rose to 1.77% from 1.74% late Wednesday.

KEEPING SCORE: The S&P 500 index fell 0.2% as of 12:10 p.m. Eastern time. The Dow Jones Industrial Average fell 43 points, or 0.2%, to 27,778. The Nasdaq fell 0.3%. The Russell 2000 index of smaller company stocks fell 0.6%.

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 2.6% following a report that LVMH would raise its bid for the company. TD Ameritrade soared 19.1% after a report that Charles Schwab was in talks to acquire it.

PayPal slipped 1.1% 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 1.3% after cutting its profit and sales forecast. Investors rewarded L Brands with a 6.8% gain after the company met Wall Street’s profit expectations.

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

OVERSEAS: European and Asian markets moved broadly lower. The Paris-based Organization for Economic Cooperation and Development forecast global economic growth to be 2.9% in 2019, which would mark the lowest growth since the financial crisis.