Wall Street dips amid mounting U.S.-China tensions

(Reuters) – Wall Street’s main indexes edged lower on Wednesday as escalating tensions between Washington and Beijing raised doubts about a trade deal, overshadowing upbeat earnings from retailers Target and Lowe’s.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., November 11, 2019. REUTERS/Brendan McDermid

China condemned a U.S. Senate measure aimed at protecting human rights in Hong Kong amid prolonged protests, while U.S. recession fears also crept back, with the gap between two-year and 10-year Treasury yields at its narrowest in three weeks.

“It (Hong Kong bill) makes it more difficult to do a trade deal,” said Tom Martin, portfolio manager at Globalt in Atlanta.

“The Congress is doing what they think they should do and eventually Trump has to put this is perspective on how he wants to play it.”

Target Corp (TGT.N) and Lowe’s Cos Inc (LOW.N) were the bright spots, with their shares jumping 12.2% and 5%, respectively, after the two companies also raised their profit forecasts.

Seven of the 11 major S&P 500 sectors were lower, with the communications services .SPLRCL and technology sectors .SPLRCT weighing the most.

The interest-rate sensitive financial index .SPSY fell 0.4% after the benchmark U.S. 10-year Treasury yield hit a three-week low.

However, the Philadelphia Semiconductor index .SOX pared some losses on news that the U.S. government had begun issuing licenses for some companies to supply goods to China’s blacklisted telecommunications company Huawei Technologies Co Ltd [HWT.UL].

Expectations of a U.S.-China trade deal, coupled with a fairly strong third-quarter earning season, have helped Wall Street’s main indexes scale record highs this month.

Focus now turns to the release of minutes from the Federal Reserve’s October policy meeting later in the day. The central bank cut interest rates for the third time this year at the meeting, but signaled it may be done with the easing for now.

At 11:42 a.m. ET the Dow Jones Industrial Average .DJI was down 91.15 points, or 0.33%, at 27,842.87, the S&P 500 .SPX was down 4.79 points, or 0.15%, at 3,115.39 and the Nasdaq Composite .IXIC was down 5.31 points, or 0.06%, at 8,565.35.

Among other stocks, apparel retailer Urban Outfitters Inc (URBN.O) slumped 14% after missing quarterly sales estimates on weaker demand for its namesake brand.

Advancing issues outnumbered decliners by a 1.09-to-1 ratio on the NYSE and by a 1.41-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and three new lows, while the Nasdaq recorded 69 new highs and 64 new lows.

Reporting by Arjun Panchadar and Agamoni Ghosh in Bengaluru; Editing by Sriraj Kalluvila and Anil D’Silva

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