US STOCKS-Wall St trims gains after Kudlow's trade comments

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* Kudlow says U.S. may move ahead on additional China
tariffs
* Xi to present Trump with terms for settling trade war -WSJ
* U.S., China agree to tentative trade truce -report
* Boeing falls as FAA cites new flaw in 737 MAX jets
* Walgreens rises on quarterly profit beat
* Indexes: Dow off 0.15%, S&P up 0.20%, Nasdaq up 0.35%

(Updates prices, comments)
By Shreyashi Sanyal
June 27 (Reuters) - U.S. stocks pared early gains on
Thursday, with the S&P 500 hitting a session low, after hopes of
a trade deal were dented by White House economic adviser Larry
Kudlow's comment that Washington may move ahead with more
tariffs on Chinese goods.
There were no preconditions set ahead of any trade talks
with China, Kudlow said, ahead of President Donald Trump's
meeting with his Chinese counterpart, Xi Jinping, this weekend.
Markets rose earlier in the session after South China
Morning Post reported that the two sides were laying out an
agreement that would help avert the next round of tariffs on an
additional $300 billion of Chinese imports. "I think expectations for a deal are still fairly low. All
markets want to see now is the trade deal is not worsening,"
said Rick Meckler, partner, Cherry Lane Investments in New
Vernon, New Jersey.
"Stock prices are fairly high by most measures and for those
looking to invest more, the lack of clarity keeps them from
making that commitment."
A Wall Street Journal report that the Chinese president
planned to present Trump with a set of terms Washington should
meet before Beijing is ready to settle their trade dispute also
tempered optimism.
Financials .SPSY rose 0.62% with big lenders leading the
charge, ahead of results of the second part of Federal Reserve's
annual stress test for banks.
Semiconductor companies, which have a sizable revenue
exposure to China, traded higher, with the Philadelphia
Semiconductor index .SOX up 1.15%. The S&P technology sector
.SPLRCT was up 0.10%.
Boeing Co BA.N fell 2.3%, pressuring the blue-chip Dow
Jones index .DJI , after Reuters reported that the U.S. Federal
Aviation Administration identified a new flaw in the
planemaker's grounded 737 MAX jets. At 11:37 a.m. ET the Dow Jones Industrial Average .DJI was
down 39.14 points, or 0.15%, at 26,497.68 and the S&P 500 .SPX
was up 5.97 points, or 0.20%, at 2,919.75.
The Nasdaq Composite .IXIC was up 27.92 points, or 0.35%,
at 7,937.89.
Data showed U.S. economic growth accelerated in the first
quarter but the export and inventory boost to activity masked
weakness in domestic demand, some of which appears to have
prevailed in the current quarter. Among other stocks, Walgreens Boots Alliance Inc WBA.O
gained 4.6%, the most on the S&P 500, after the drugstore chain
beat analysts' expectations for quarterly profit.
Ford Motor Co F.N rose 2% after the carmaker said it will
have cut 12,000 jobs in Europe by the end of next year to try to
return the business to profit.
Conagra Brands Inc CAG.N tumbled 11.4%, the most among S&P
500 companies, after the packaged food company's quarterly sales
and profit fell short of analysts' estimates. Advancing issues outnumbered decliners by a 1.98-to-1 ratio
on the NYSE and by a 2.32-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and one new
low, while the Nasdaq recorded 19 new highs and 35 new lows.