Investing.com – Wall Street fell on Tuesday, but pared some losses moments before the close after top White House economic adviser Lawrence Kudlow said a report that the U.S. canceled a meeting with Chinese officials over trade was untrue.
The Dow Jones Industrial Average slumped 1.22% to close at 24,404.48, above session lows of 24,244.31. The S&P 500 fell 1.42%, while the Nasdaq Composite lost 1.91%.
The U.S. called off this week's talks with China on trade due to outstanding differences on two issues concerning intellectual property rights and Chinese subsidies that discriminate against foreign investors, The Financial Times reported, citing people briefed on the negotiations.
Kudlow refuted the report on television, restoring investor hopes somewhat that both sides would be able to resolve their differences on trade ahead of the March 1 deadline, after which, in the absence of an agreement, the U.S. could raise duties on imports from China to 25% from 10%. Kudlow also confirmed that a meeting with Chinese Vice-Premier Liu He later this month would go ahead.
Washington and Beijing have introduced multiple rounds of tariffs on the imports of one another’s goods in recent months.
The U.S. has slapped tariffs on $250 billion worth of Chinese goods, about half the value of U.S. imports from the country. China has retaliated with tariffs on $110 billion worth of American exports.
Trade sensitive-sectors like industrials, which were already nursing losses following a slump in tool maker Stanley Black & Decker, eased from lows but still closed lower.
Stanley Black & Decker (NYSE:SWK) fell 15.5% after soft guidance offset above-consensus fourth-quarter earnings of $2.11 a share on $3.63 billion in revenue. Analysts were expecting earnings of $2.10 a share on $3.62 billion in revenue.
Beyond trade, tech also played its part in the sell off as FANG stocks slipped, led by Netflix.
Netflix (NASDAQ:NFLX) added to losses from last week, when the streaming giant reported mixed fourth-quarter results and guidance. Its shares fell 4%.
Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL) and Alphabet NASDAQ:GOOGL) also ended the day lower.
Stocks had made a negative start to the session in the wake of the International Monetary Fund's bearish outlook on global growth.
IMF Managing Director Christine Lagarde said the IMF modestly cut its global growth forecast for 2019 to 3.5% from 3.7%.
There was little to cheer on the economic front as data showed existing home sales in December fell to their lowest level in more three years.
Homebuilders fell on the news, led by a 4% slump in shares of KB Home (NYSE:KBH).
In corporate news, eBay (NASDAQ:EBAY) rallied 6% after two activist hedge funds, including Elliott Management, took stakes in e-commerce company. The funds urged eBay to break itself apart and revamp its management team.
Top S&P 500 Gainers and Losers Today:
eBay (NASDAQ:EBAY), Cboe Global Markets (NYSE:CBOE) and Fifth Third Bancorp (NASDAQ:FITB) were among the top S&P 500 gainers for the session.
Arconic (NYSE:ARNC), Stanley Black & Decker (NYSE:SWK) and Altria Group (NYSE:MO) were among the worst S&P 500 performers of the session.