Stocks went into negative territory on Wednesday after report said President Donald Trump and Chinese leader Xi Jinping likely won’t meet to sign a trade deal until December.
The Dow Jones Industrial Average fell about 43 points, or 0.2%, while the S&P 500 was about 0.1% lower. The Nasdaq Composite declined 0.5% as big tech including Amazon, Microsoft and Facebook all underperformed. The 30-stock Dow hit another record close in the previous session.
The meeting between Trump and Xi could be delayed as the two sides still need to decide on the terms and a venue, Reuters reported Wednesday, citing a senior Trump administration official. The report also said it’s still possible the two countries will not reach a trade pact.
“It’s longer than they wanted and the longer it stretches out, the greater the risk it blows up,” said Art Cashin, director operations at UBS.
Last month, the U.S. and China reached a truce and started working to finalize a “phase one” trade agreement that includes a pause in tariff escalation and China buying U.S. agriculture products. Trump said last week a new location for signing the limited deal will be announced soon after the initial gathering in mid-November was canceled due to unrelated reasons.
Wall Street analysts also poured cold water on trade-deal hopes. Donald Straszheim, Evercore ISI head of China research, said Wednesday Xi is not coming to the U.S. as “mistrust dominates.” China is reportedly pushing for Trump to remove more tariffs imposed in September on around $125 billion worth of Chinese goods.
HP surged more than 10% on Wednesday following a CNBC report that said Xerox has made a cash-and-stock offer for the personal-computer and printer maker. CVS Health rose 4.7% on stronger-than-expected third-quarter earnings.
The Dow’s year-to-date gain now stands at nearly 18% after rallying 3.3% in the past month. The S&P 500 is up more than 22% this year after surging 4% in the past month.
Stocks had gotten a boost from better-than-expected economic data. A gauge for U.S. services activities topped expectations for October, while the labor market remains solid as jobs creation easily beat estimate last month.
However, U.S. productivity dropped by the most since the fourth quarter of 2015 during the third quarter, the Labor Department said on Wednesday.
Corporate profits have been largely solid this earnings season as 75% of S&P 500 companies to report thus far have topped analysts’ expectations, FactSet data show.
— CNBC’s Patti Domm and Elliot Smith contributed to this report.
Source: Top News and Analysis (pro)