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US STOCKS-Wall Street dips as financials weigh, trade hopes dim

Published 27/08/2019, 19:29
© Reuters.  US STOCKS-Wall Street dips as financials weigh, trade hopes dim
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* U.S. yield curve inversion deepens; Financials fall

* J&J up after opioid lawsuit decision

* Dow down 0.35%, S&P 500 down 0.28%, Nasdaq down 0.39%

(Updates to mid-afternoon, changes byline)

By Chuck Mikolajczak

NEW YORK, Aug 27 (Reuters) - Wall Street slipped on Tuesday,

weighed down by financial stocks as a deepened yield curve

raised U.S. recession worries, while uncertainty reigned on the

progress of trade negotiations between the U.S. and China.

U.S, stocks initially opened higher, building on Monday's

advance, as U.S. President Donald Trump predicted another round

of talks with Beijing. China's foreign ministry, however,

reiterated on Tuesday that it had not received any recent U.S.

telephone call on trade. Further weighing on sentiment was a deepening of the

inversion in the yield curve between the 2-year and 10-year U.S.

Treasuries US2US10=RR , underscoring worries about a weakening

global economy. "The progression of trade talks seem to occur very much in

real time and it is the primary influence around what it is

driving the capital markets at this point," said Bill Northey at

U.S. Bank Wealth Management in Minneapolis.

"You have this degree of uncertainty and what has seemed to

be a period of heightened uncertainty, that certainly does

impact confidence and confidence does drive behaviors like

spending and investing, which ultimately manifest in economic

activity."

The Dow Jones Industrial Average .DJI fell 94.15 points,

or 0.36%, to 25,804.68, the S&P 500 .SPX lost 8.7 points, or

0.30%, to 2,869.68 and the Nasdaq Composite .IXIC dropped

32.57 points, or 0.41%, to 7,821.16.

Financial shares .SPSY , which tend to weaken in lower rate

and soft economic environments, lost 0.84%, while defensive

sectors such as utilities .SPLRCU and real estate .SPLRCR

led advancing sectors.

The S&P 500 has lost nearly 4% in August on worries the

impact of the intensifying U.S.-China trade war will have on the

slowing global economy and corporate profits, along with

uncertainty around the pace of U.S. interest rate cuts from the

Federal Reserve.

With the next Federal Reserve meeting scheduled for

mid-September, investors are gauging the strength of the U.S.

economy for clues on where rates are headed. They will have data

on the labor market and manufacturing next week to consider

before the policy announcement.

Among stocks, Johnson & Johnson JNJ.N shares rose 1.93%

after an Oklahoma judge said J&J must pay $572.1 million for its

part in fueling the U.S. opioid epidemic, a sum that was

substantially less than what investors had expected.

Philip Morris International (NYSE:PM) PM.N shares fell 7.42% after

the tobacco maker said it was in talks with Altria Group (NYSE:MO) Inc

MO.N to combine in an all-stock merger of equals. Altria's

shares were down 3.53%. Shares in J. M. Smucker Co SJM.N tumbled 7.03% after the

packaged food maker cut its full-year earnings forecast and

missed estimates for quarterly profit and sales. Declining issues outnumbered advancing ones on the NYSE by a

1.57-to-1 ratio; on Nasdaq, a 2.51-to-1 ratio favored decliners.

The S&P 500 posted 28 new 52-week highs and 29 new lows; the

Nasdaq Composite recorded 33 new highs and 188 new lows.

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