* USTR threatens $4 bln in additional tariffs on EU goods
* Energy falls the most among S&P 500 sectors
* Dow up 0.26%, S&P 500 up 0.29%, Nasdaq up 0.22%
(Updates to market close)
By Chuck Mikolajczak
NEW YORK, July 2 (Reuters) - U.S. stocks managed modest
gains on Tuesday after holding near the unchanged mark for much
of the session as enthusiasm over the U.S.-China trade truce
faded after the United States threatened tariffs on additional
European goods.
Washington's proposed tariffs on $4 billion worth of
European Union goods in an extended dispute over aircraft
subsidies came just as trade tensions with China seemed to be
easing.
Still, stocks have rallied to push the S&P 500 to a record
for a second straight session in the wake of the U.S. trade
truce with China. The benchmark index finished Monday's session
well off its highs, however, as investors questioned the lack of
details in the agreement.
The S&P 500 had rallied nearly 7% in June on hopes the two
largest economies in the world would find a way to end their
trade war.
With U.S. and global economic data showing signs of slowing,
the focus for investors will now turn to monetary policy and the
upcoming earnings season. "We've got a wait and see on the trade deal, a wait and see
on the Fed, a wait and see on earnings and all of that is in
front of us by at least two weeks," said Art Hogan, chief market
strategist at National Securities in New York.
"I am not surprised at all to see this market shift into
sideways action."
The Dow Jones Industrial Average .DJI rose 69.25 points,
or 0.26%, to 26,786.68, the S&P 500 .SPX gained 8.65 points,
or 0.29%, to 2,972.98 and the Nasdaq Composite .IXIC added
17.93 points, or 0.22%, to 8,109.09.
The softening data triggered a drop of about 3% in crude oil
prices despite an agreement among oil producers to extend supply
cuts and pushed the energy sector .SPNY down 1.74%, the
biggest drag on markets. The defensive real estate .SPLRCR , up
1.82% and utilities .SPLRCU , up 1.24% sectors were the best
performers on the session. Oil majors Exxon Mobil Corp XOM.N and Chevron Corp CVX.N
declined more than 1% each, while Apache Corp APA.N slumped
more than 6%.
Cleveland Fed President Loretta Mester, a Federal Reserve
policymaker, on Tuesday expressed skepticism that a U.S.
interest rate cut is the right move until there are more signs
the economy is moving to a truly weaker path. Market participants still expect the Fed to cut interest
rates at its July 30-31 policy meeting, despite the latest
developments in trade talks.
Automatic Data Processing ADP.O lost 2.66%, pressuring the
tech-heavy Nasdaq, after market sources said brokerage Jefferies
is re-offering 8 million of the company's shares at a discount.
L3Harris Technologies LHX.N gained 4.28%, making it the
best performer on the S&P 500, after Jefferies added the defense
contractor to its top picks for aerospace and defense
electronics for the second half of 2019.
Investors are now awaiting the monthly jobs report on
Friday, which is expected to show the private sector added
160,000 jobs in June, after May's sharp slowdown in jobs growth.
Advancing issues outnumbered declining ones on the NYSE by a
1.24-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored decliners.
The S&P 500 posted 41 new 52-week highs and 1 new lows; the
Nasdaq Composite recorded 65 new highs and 55 new lows.
About 6.36 billion shares changed hands in U.S. exchanges,
compared with the 7.02 billion daily average over the last 20
sessions.