(Reuters) – U.S. stocks were nearly flat in choppy trading on Wednesday, ahead of a crucial round of trade talks that will be held against the backdrop of additional tariffs on Chinese goods due later this week.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 8, 2019. REUTERS/Brendan McDermid
The United States will raise tariffs to 25% from 10% on $200 billion worth of Chinese imports effective Friday, according to a notice posted to the Federal Register, days after President Donald Trump threatened the duties after China backtracked on almost all aspects a trade deal.
Still, the top Chinese trade negotiator, Vice Premier Liu He, will go to Washington for the talks on Thursday and Friday, setting up a last-ditch bid to salvage the negotiations.
“It has been a bipolar flow of information on trade. Investors are acknowledging that the negotiations are more constructive,” said Eric Wiegand, senior investment strategist at U.S. Bank Wealth Management in New York.
“Today’s move reflects the inconclusive nature of what we are dealing with. It’s hard for investors to really position themselves after you are just hearing rhetoric and not seeing formal policies put in place.”
Boeing Co, the single largest U.S. exporter to China slipped 0.5%, while chipmakers, which get a large chunk of their revenue from China, also declined.
The Philadelphia chip index fell 0.24%. The index has declined over 4% so far this week, and is on pace to post its biggest percentage weekly loss since Dec. 21.
The spike in tensions between the world’s two largest economies has renewed fears of a global economic slowdown and encouraged investors to seek low-risk government bonds, resulting in longer-dated U.S. Treasury yields dropping. [US/]
Interest-rate sensitive banking stocks fell 0.31%, while the broader financial sector declined 0.19%.
Limiting the losses were the 0.8% gains in iPhone maker Apple Inc and Walt Disney Co, which is due to report results after the bell.
At 10:18 a.m. ET, the Dow Jones Industrial Average was up 16.91 points, or 0.07%, at 25,982.00. The S&P 500 was up 1.84 points, or 0.06%, at 2,885.89 and the Nasdaq Composite was up 3.11 points, or 0.04%, at 7,966.87. The benchmark S&P 500 is now more than 2% away from its record high of 2,954.13 hit last week.
With results entering the final stretch, first-quarter earnings are now expected to rise 1.2%, a sharp improvement from the 2.3% decline expected at the start of the season.
Of the 426 S&P companies that have reported so far, about 75% have beaten profit estimates, according to Refinitiv data.
Electronic Arts Inc rose 2.9% after the videogame maker posted better-than-expected quarterly revenue, riding on the popularity of its battle royale game, “Apex Legends”.
Chesapeake Energy Corp fell 1.4% after the oil and gas producer’s first-quarter net loss widened, hit by a fall in production and lower crude prices.
Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE and by a 1.08-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and five new lows, while the Nasdaq recorded 18 new highs and 29 new lows.
Reporting by Amy Caren Daniel and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila