* USTR threatens $4 bln in additional tariffs on EU goods
* Energy falls the most among S&P 500 sectors
* Dow up 0.05%, S&P 500 up 0.05%, Nasdaq down 0.11%
(Updates to mid-afternoon; adds dateline, changes byline)
By Chuck Mikolajczak
NEW YORK, July 2 (Reuters) - U.S. stocks held near the
unchanged mark on Tuesday as optimism over the U.S.-China trade
truce faded after the United States threatened tariffs on
additional European goods, stalling a recent rally.
Washington's proposed tariffs on $4 billion worth of EU
goods in a long-running dispute over aircraft subsidies unnerved
investors and came just as trade tensions with China seemed to
be easing.
Stocks had rallied to push the S&P 500 to a record on Monday
in the wake of the U.S. trade truce with China, but stocks
finished well off their highs 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.
"There really was this expectation on the inside of the
Street that Trump would deliver on something that gave a lift to
confidence and lift to the prospects for international trade
-that is really what fueled the move," said Peter Kenny of
Kenny's Commentary LLC and Strategic Board Solutions LLC.
"Now that is done, now that is in the rear view mirror, what
is next?"
The Dow Jones Industrial Average .DJI rose 1.74 points, or
0.01%, to 26,719.17, the S&P 500 .SPX gained 1.03 points, or
0.03%, to 2,965.36 and the Nasdaq Composite .IXIC dropped 6.51
points, or 0.08%, to 8,084.65.
With U.S. and global economic data showing signs of slowing,
Kenny said the focus for investors will now turn to monetary
policy and the upcoming earnings season. nL2N23Z14E
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 1.94%, the
biggest drag on markets. 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 5%.
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 3.21%, 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 4.01%, 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.
Gilead Sciences Inc GILD.O rose 1.04% after the drugmaker
said it will submit a new drug application for its arthritis
drug to the FDA this year. 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
1.03-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored decliners.
The S&P 500 posted 34 new 52-week highs and 1 new lows; the
Nasdaq Composite recorded 54 new highs and 45 new lows.