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Stocks Dip as Investors Brace for Trade War Negotiations This Week

Stocks Dip as Investors Brace for Trade War Negotiations This Week

Stocks gave up some meager midday gains and ended broadly lower on Wall Street, extending the market’s losing streak into a fourth week and more in Monday’s Stock Market Update.

Technology companies and makers of consumer products led the way lower on Monday. Broadcom lost 1.9% and Pepsi lost 1.4%.

Traders are keeping a close eye on the latest round of trade talks between the U.S. and China, which are resuming this week. The dispute has been whipsawing markets for months.

The market is coming off a three-week skid following a mixed batch of economic data that stoked investors’ worries that a slowdown in U.S. economic growth could worsen. Last week, the S&P 500 posted its first back-to-back losses of 1% this year as surprisingly weak numbers in surveys of manufacturing and service industries raised worries that the economy could slip into a recession.

The costly and long-running trade war between the U.S. and China remains a key source of uncertainty for markets, which have been volatile in response to the ups and downs in the conflict.

STOCK MARKET UPDATE

KEEPING SCORE: The S&P 500 fell 13 points, or 0.4%, to 2,938. The Dow Jones Industrial Average lost 95 points, or 0.4%, to 26,478. The Nasdaq lost 26 points, or 0.3%, to 7,956.

Major stock indexes in Europe closed broadly higher. Stocks in Asia ended mixed. Chinese markets are due to reopen on Tuesday after a weeklong break.

Bond prices fell, pushing the yield on the 10-year Treasury rose to 1.56% from 1.51% late Friday.

MARKET NERVES: The market is coming off three straight weekly losses. Investors digested a series of mostly disappointing economic reports last week that showed the U.S.-China trade war is hurting manufacturing and threatening U.S. economic growth. Some of those fears were allayed on Friday when a government jobs report showed that employers are still adding jobs at a healthy clip and that the national unemployment rate dropped to a five-decade low.

Still, last week marked the third weekly loss in a row for the broader market as the trade war takes its toll on confidence.

The combination of uncertainty over the trade war and the impeachment inquiry drama unfolding in Washington is likely to continue to drag on the U.S. economy, said Tony Roth, chief investment officer at Wilmington Trust.

“And that’s why the markets are treading water right now, waiting to see if another shoe drops,” Roth said.

SECTORS AND MOVERS: Broadcom led the slide in technology stocks, dropping 1.9%.

Beverage companies fell amid a sell-off in consumer product makers. Constellation Brands fell 2.5% and PepsiCo dropped 1.4%.

Several big retailers also fell. Dollar Tree slid 3% and Ulta Beauty lost 3.1%.

Financial sector stocks headed lower, giving up early gains. Wells Fargo slid 0.8% and Progressive dropped 1.4%.

Discovery led the gains in the communication services sector. The stock rose 1.3%.

ENGINE PROBLEMS: General Motors has lost nearly 10% of its value since contract negotiations with the now striking United Auto Workers started to falter. The situation has taken another bad turn as negotiations hit a snag over product commitments for U.S. factories.

Workers were warned by United Auto Workers vice president Terry Dittes on September 6 that bargaining was moving slowly. Workers moved to picket lines on September 16, crippling the company’s factories and accelerating stock losses.

Despite the labor issues, General Motor’s stock is still up 4.8% for the year, though that is far behind competitor Ford’s 13.8% annual gain.

SLICK MOVE: ConocoPhillips climbed 2% after the energy company raised its quarterly dividend by 38% and will buy back $3 billion of its stock in 2020.

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