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NEW YORK – Stocks are lower on Wall Street in afternoon trading as investors wait for more details on reports that the U.S. and China are moving closer to a deal to resolve their costly trade dispute.
Stocks fell back in afternoon trading, erasing an early rally. The market is still solidly higher after a strong January and February helped push the Standard & Poor’s 500 to its best yearly start since 1991.
The world’s two largest economies have pulled back from an immediate escalation of their damaging trade war since they started negotiating last month. President Donald Trump postponed a deadline for raising tariffs on more Chinese goods, citing progress in a series of talks. Now, media reports say the nations could strike a deal this month.
The main sticking point for the U.S. is China’s technological ambitions. The U.S. has accused China of stealing technology and forcing companies to turn over technology in order to do business.
Tit-for-tat tariffs imposed by both nations have raised prices on a variety of goods. China could be close to a deal that would cut tariffs on U.S. farm, auto and other products and the U.S. is considering removing most sanctions on imports, according to media reports.
Technology stocks, industrial and internet companies were among the biggest decliners in midday trading. Homebuilders, including PulteGroup and Lennar, rose following a report that showed 2018 was a record year for construction spending. AT&T fell after it said it will reorganize its WarnerMedia unit.
KEEPING SCORE: The Dow Jones Industrial Average fell 275 points, or 1.1 percent, to 26,759 as of 12:10 p.m. The S&P 500 index fell 0.8 percent and the Nasdaq composite fell 0.8 percent.
ZOMBIE COMPETITION: Children’s clothing retailer Children’s Place gave investors a dismal forecast after reporting a disappointing fourth quarter. The stock fell 10.1 percent.
The main issue is competition from dying competitors holding liquidation sales. Rivals Gymboree and Crazy 8 stores have been in the process of shutting down, which means liquidation sales and better deals for shoppers.
“We have never experienced a total liquidation of a direct competitor of the size and proximity of Gymboree,” Children’s Place CEO Jane Elfers said in a prepared statement.
HOMEBUILDERS RISE: PulteGroup, Lennar and others rose after a government report said 2018 was a record year for construction spending.
The Commerce Department reported that construction spending rose 4.1 percent to $1.3 trillion, marking an all-time high. Spending edged lower in December, though, reflecting slower growth within the wider housing sector.
PulteGroup rose 3.2 percent and Lennar gained 1.4 percent.
BIOTECH BUMP: Gene therapy developer Nightstar Therapeutics surged 66 percent after biotech giant Biogen offered to buy it for $877 million in cash. Nightstar is developing treatments for rare eye conditions.
Biogen and other large drug developers have been trying to expand their portfolios to include gene therapy and treatments for rare conditions. Those treatments are expensive to develop, but command better prices if they make it to market.
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