Stocks wobble in early trading as caution lingers over trade
NEW YORK (AP) — Stocks are wobbling between small gains and losses in early trading on Wall Street Monday as investors remain cautious about the prospects of a full trade agreement between the U.S. and China.
Technology stocks were posting some solid gains even as the energy sector fell because of a decline in the price of crude oil. Safe-play sectors like utilities held up relatively well.
Bond markets and the U.S. government were closed for the Columbus Day holiday.
Washington and Beijing agreed to a truce following talks last week. The U.S. held off on tariffs set to kick in this week and China agreed to buy more farm goods. But the U.S. has yet to cancel plans for more tariffs in December and the nations still have several complicated issues to negotiate.
KEEPING SCORE: The S&P 500 index edged down 0.1% as of 10:16 a.m. Eastern time. The Dow Jones Industrial Average rose 20 points, or 0.1%, to 26,836. The Nasdaq fell 0.1%. Small-company stocks did worse than the rest of the market. The Russell 2000 index lost 0.7%.
OVERSEAS: European markets fell. The European Union faces a potential trade war with the U.S. as the Trump administration readies trade sanctions on up to $7.5 billion worth of goods. They are set to go into effect Friday and stem from a dispute over subsidies to the airplane maker Airbus.
Meanwhile, Britain is still heading toward its Oct. 31 exit from the European Union without a deal on trade.
TRADE UNCERTAINTY: Investors applauded the progress made by the U.S. and China last week, but uncertainty remains over whether they can ink a broader deal. The U.S. agreed to suspend a planned hike in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products.
The truce was a result of the 13th round of negotiations between the nations since the trade war began well over a year ago. The key sticking point of intellectual property and trade secrets still hangs over the dispute.
The overall picture hasn't changed for companies, which are still holding off on forecasts and investments because of the uncertain trade situation.
"There is not yet a viable path to existing tariffs declining and tariff escalation remains a meaningful risk," Michael D. Zezas, a Morgan Stanley strategist, wrote in a note to clients. "Thus, we do not expect a meaningful rebound in corporate behavior that would drive global growth expectations higher."
Trump and Chinese President Xi Jinping are due to attend an economic conference in Chile in mid-November. That is raising hopes a face-to-face meeting might produce progress.
SAPPED ENERGY: Energy companies fared worse than most of the market in the early going as crude oil prices slid 3%. Oilfield services company Halliburton fell 4.4%.