S&P 500, Dow slip as trade-fuelled rally pauses

S&P 500, Dow slip as trade-fuelled rally pauses

S&P 500, Dow slip as trade-fuelled rally pauses

The technology sector provided the biggest boost to the S&P 500, riding on an 8.3% jump in Qualcomm Inc. shares after the chipmaker forecast current-quarter profit above analysts' estimates. The Dow Jones Industrial Average picked up 3 points to around 27,678, based on preliminary numbers.

The benchmark index is on track for its best year since 2013, while the Nasdaq and Dow are eyeing yearly gains after dropping in 2018. The news sent all three major U.S. stock indexes sharply lower, but they quickly recovered to trade near flat.

Investors grew more confident about economic growth, piling into shares of cyclical stocks during the week and unraveling bets on safer investments like Treasurys.

The financials sector was also lower as the benchmark USA 10-year Treasury yield came down from the three-month high hit on Thursday. Stocks rallied on easing concerns around the possibility of a recession. On the same day that China said Beijing and Washington have agreed to mutually lift some tariffs as part of a "phase-one" deal, Peter Navarro, a senior USA trade adviser, said there was no formal agreement in place and the final decision would lie with Mr. Trump.

Stocks rose to record highs on Thursday after the world's two largest economies reportedly agreed to remove existing trade tariffs, sparking a huge rotation into equities and out of bonds.

Tim Ghriskey, chief investment strategist at Inverness Counsel in NY, said that while the market was initially volatile because of Trump's remarks, it climbed right back. "Today, we are just seeing a bit of a recalibration of that over-optimism from a news headline without any hard facts".

Walt Disney Co gained 3.96 per cent as its popular theme parks and a remake of "The Lion King" lifted earnings, and the company also spent less than it had projected on its online streaming service, Disney+.

Among other stocks, Gap Inc tumbled 9.2% after saying Chief Executive Art Peck would leave the company, a surprise exit in the middle of a restructuring that comes as the apparel retailer slashed its full-year earnings forecast.

Oil prices also slipped as the cautious mood on the U.S. -China trade truce and an upbeat corporate earnings season. Brent crude, the global oil benchmark, fell about 2%. The University of Michigan's consumer sentiment index rose to a reading of 95.7 this month from 95.5 in October. The Hang Seng declined 0.7% and the Shanghai Composite Index lost 0.5%.

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