US STOCKS-Wall Street muted as trade optimism fades

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* USTR threatens $4 bln in additional tariffs on EU goods
* Gilead rises on plans for new drug filing
* Energy falls the most among S&P sectors
* Dow up 0.02%, S&P up 0.07%, Nasdaq flat

(Updates prices, adds comments)
By Shreyashi Sanyal
July 2 (Reuters) - Wall Street's main indexes were subdued
on Tuesday, as a trade truce-fueled relief rally in the previous
session fizzled out after the United States threatened
additional tariffs on European goods.
Washington's proposed tariffs on $4 billion of additional EU
goods in a long-running dispute over aircraft subsidies came
just as trade tensions with China seemed to be easing and
unnerved investors.
The threat of new EU tariffs adds to the lack of clarity
around global trade and will be in the back of investors' minds,
said Eric Wiegand, a senior portfolio manager at U.S. Bank
Wealth Management in New York.
Wiegand also said markets could see heightened volatility on
Wednesday due to thin trading volumes ahead of the July Fourth
holiday.
Adding to the downbeat mood was a clutch of weak
manufacturing data from around the world that rekindled global
growth fears.
The concerns triggered a drop in crude prices despite an
agreement among oil producers to extend supply cuts and pushed
the energy sector .SPNY down 1.58%, the biggest drag on
markets. O/R
The S&P 500 index .SPX hit a record high on Monday after
Washington and Beijing agreed over the weekend to resume trade
talks after negotiations broke down in May. The breakdown had triggered the worst monthly performance
this year, but markets have since recouped most of their losses
on hopes that the Federal Reserve would be more accommodative to
counter a slowing global economy.
Market participants still expect the Fed to cut interest
rates at its July 30-31 policy meeting, despite the latest
developments in trade talks.
The Dow Jones Industrial Average .DJI rose 5.5 points, or
0.02%, to 26,722.93 and the S&P 500 .SPX gained 2.04 points,
or 0.07%, to 2,966.37.
The Nasdaq Composite .IXIC added 0.17 points, or 0%, to
8,091.34.
Investors will track the monthly jobs report on Friday,
which is expected to show that the private sector added 160,000
jobs in June, after a sharp slowdown in jobs growth in May.
Among stocks, Automatic Data Processing ADP.O slipped 4%,
after market sources said brokerage Jefferies is re-offering 8
million of the company's shares at a discount. L3Harris Technologies LHX.N gained 3.4%, the most 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.
Oil majors Exxon Mobil Corp XOM.N and Chevron Corp
CVX.N declined more than 1% each. O/R
Gilead Sciences Inc GILD.O rose 1.4% after the drugmaker
said it will submit a new drug application for its arthritis
drug to the FDA this year. Advancing issues outnumbered decliners by a 1.04-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.39-to-1 ratio on the Nasdaq.
The S&P index recorded 30 new 52-week highs and no new low,
while the Nasdaq recorded 43 new highs and 24 new lows.