* Stock market to be shut for Labor day on Monday
* Ulta Beauty tumbles on full-year forecast cut
* U.S. consumer spending increases strongly
* Dow up 0.12%, S&P 500 flat, Nasdaq down 0.34%
(Updates market action, adds comments)
By Akanksha Rana
Aug 30 (Reuters) - Gains on Wall Street petered out on
Friday, with the Nasdaq index turning negative, as an upbeat
mood fueled by signs of upcoming U.S.-China trade talks and
solid domestic consumer spending data, waned ahead of a long
Labor day weekend.
The three main indexes opened higher, following data which
showed strong U.S. consumer spending in July and signals from
Washington and Beijing on Thursday, that they will resume trade
talks, as the countries discussed the next round of in-person
negotiations in September. With analysts saying investors were taking money off the
table ahead of Labor Day weekend, by midday only the Dow Jones
Industrial Average .DJI was clearly in positive territory.
"Frankly, markets have been overly optimistic about trade,"
said Randy Frederick, vice president of trading and derivatives
for Charles Schwab (NYSE:SCHW) in Austin.
"I would caution people to be a little careful because
optimism won't last if it doesn't ultimately materialize into
something substantive like an agreement which I just have a hard
time seeing it happen."
A sharp heightening of tensions this month after the U.S.
and China slapped tariffs on each other's goods, caused panic
across global markets and resulted in a key part of the U.S.
yield curve, a closely-followed recession indicator, inverting.
That has Wall Street's main indexes on course for monthly
losses of up to 3%. Still, the markets are also on course for
their best weekly gain since June and the benchmark S&P 500
.SPX is now just 3.6% away from a record high hit in July.
Markets are also bracing for a new round of U.S. tariffs on
some Chinese goods to come into effect on Sunday and the
technology sector .SPLRCT was the biggest weight on the S&P
with a 0.3% loss.
Ulta Beauty Inc ULTA.O tumbled 28.8%, to the bottom of the
S&P 500, after the cosmetics company cut its full-year profit
forecast.
Hopes that the Federal Reserve would step in to impede any
slowdown in economic growth as a result of the trade war, have
led traders to fully price in an interest rate cut at the next
meeting of the U.S. central bank in mid-September.
A monthly jobs report and manufacturing data next week will
add fuel for thought on the health of the U.S. economy.
At 11:52 a.m. ET, the Dow Jones Industrial Average .DJI
was up 32.06 points, or 0.12%, at 26,394.31, the S&P 500 .SPX
was down 0.60 points, or 0.02%, at 2,923.98. The Nasdaq
Composite .IXIC was down 26.92 points, or 0.34%, at 7,946.48.
The biggest gainer on the benchmark index was Campbell Soup
Co CPB.N , which jumped 8.7% after its quarterly profit beat
estimates. Advancing issues outnumbered decliners by a 1.22-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.09-to-1 ratio on the Nasdaq.
The S&P index recorded 34 new 52-week highs and no new low,
while the Nasdaq recorded 32 new highs and 41 new lows.