Stocks stall in midday trading as caution lingers over trade
An investor adjusts his hat as he monitors stock prices at a brokerage house in Beijing, on Sept. 5, 2019. (Mark Schiefelbein / AP)
Damian J. Troise, The Associated Press
Published Monday, October 14, 2019 5:50AM EDT
Last Updated Monday, October 14, 2019 11:57AM EDT
NEW YORK -- Stocks stalled in midday trading on Wall Street Monday as investors remain cautious about the prospects of a full trade agreement between the U.S. and China.
Technology and health care stocks were posting some solid gains even as the energy sector fell because of a decline in the price of crude oil.
The market started shifting sideways after falling in the early going. The muted trading follows a rally Friday that pushed the market to a weekly gain after three straight weeks of losses.
Washington and Beijing agreed to a truce following talks last week. The U.S. held off on tariffs set to kick in this week and China agreed to buy more farm goods. But the U.S. has yet to cancel plans for more tariffs in December and the nations still have several complicated issues to negotiate.
Bond markets and the U.S. government were closed for the Columbus Day holiday.
KEEPING SCORE: The S&P 500 index was unchanged as of 11:50 a.m. Eastern time. The Dow Jones Industrial Average rose 22 points, or 0.1%, to 26,839. The Nasdaq rose 0.1%. Small-company stocks did worse than the rest of the market. The Russell 2000 index lost 0.3%.
OVERSEAS: European markets fell. The European Union faces a potential trade war with the U.S. as the Trump administration readies trade sanctions on up to $7.5 billion worth of goods. The tariffs are set to go into effect Friday and stem from a dispute over subsidies to the airplane maker Airbus.
TRADE UNCERTAINTY: Investors applauded the progress made by the U.S. and China last week, but uncertainty remains over whether they can ink a broader deal. The U.S. agreed to suspend a planned hike in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products.
The truce was a result of the 13th round of negotiations between the nations since the trade war began well over a year ago. The key sticking points of intellectual property and trade secrets still hang over the dispute.
The overall picture hasn't changed for companies, which are still holding off on forecasts and investments because of the uncertain trade situation.
"There is not yet a viable path to existing tariffs declining and tariff escalation remains a meaningful risk," Michael D. Zezas, a Morgan Stanley strategist, wrote in a note to clients. "Thus, we do not expect a meaningful rebound in corporate behaviour that would drive global growth expectations higher."
Trump and Chinese President Xi Jinping are due to attend an economic conference in Chile in mid-November. That is raising hopes a face-to-face meeting might produce progress.
BANKS ON DECK: Several major banks will report their latest quarterly financial results this week and give investors an opening glimpse into the latest round of corporate earnings. JPMorgan Chase, Citigroup and Wells Fargo will all report results on Tuesday. Bank of America and PNC Financial will report results on Wednesday.
Investors will be watching for information on income from loans as banks contend with sinking bond yields. Falling yields force banks to set lower rates on mortgages and other kinds of loans.
SAPPED ENERGY: Energy companies fared worse than most of the market as crude oil prices slid 2.4%. Oilfield services company Halliburton fell 2.6%.