NEW YORK (REUTERS) – US stocks flitted between gains and losses on Wednesday (May 8), as investors assessed the latest developments on trade, ahead of a crucial round of talks between the United States and China.
The United States said it will on US$200 billion (S$272 billion) worth of Chinese imports on Friday, even as China’s top trade negotiator, Vice Premier Liu He, is due to visit Washington on Thursday and Friday in a last-ditch effort to strike a deal.
China’s commerce ministry later said it would have to take necessary retaliatory measures if tariffs are raised.
“The market is trying to price in three potential outcomes: one is a deal being made, another is an increase in tariffs and the third is kicking the can down the road to keep negotiating,”said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.
“Everyone will go into ‘tread water’ mode until Friday because why would you make any big decisions before then, when you can hear more about it on Friday?” Trade-sensitive industrial bellwethers Boeing Co, and Caterpillar Inc dipped 0.3 per cent.
The heightening tensions between the world’s two largest economies renewed fears of a global economic slowdown and has resulted in the benchmark S&P 500 moving more than 2 per cent away from its record high of 2,954.13 hit last week.
A bright spot in markets was a 1 per cent gain in shares of iPhone maker Apple Inc and Walt Disney Co. The media company is due to report results after the bell.
At 12:34 p.m. ET, the Dow Jones Industrial Average was up 47.91 points, or 0.18 per cent, at 26,013.00. The S&P 500 was up 4.71 points, or 0.16 per cent, at 2,888.76 and the Nasdaq Composite was up 10.57 points, or 0.13 per cent, at 7,974.32.
With earnings season entering its final stretch, first-quarter profits are now seen rising 1.2 per cent, a sharp improvement from the 2.3 per cent decline expected at the start of the season.
Of the 426 S&P companies that have reported so far, about 75 per cent have beaten profit estimates, according to Refinitiv data.
TripAdvisor Inc tumbled 11 per cent, the most among S&P companies, after the online travel company’s quarterly revenue missed analysts’ estimates.
Advancing issues outnumbered decliners by a 1.13-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and six new lows, while the Nasdaq recorded 33 new highs and 52 new lows.