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U.S. Stocks Close Slightly Lower Following Lackluster Session

wallstreet sept12 10dec19 lt

Following the modest pullback seen over the course of the previous session, stocks showed a lack of direction over the course of the trading session on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line.

Eventually, the major averages ended the day slightly lower. The Dow slipped 27.88 points or 0.1 percent to 27,881.72, the Nasdaq edged down 5.64 points or 0.1 percent to 8,616.18 and the S&P 500 dipped 3.44 points or 0.1 percent to 3,132.52.

The choppy trading on Wall Street came as traders digested the latest news on the trade front, with House Democrats announcing an agreement on President Donald Trump's trade deal with Canada and Mexico.

The deal will allow the United States-Mexico-Canada Agreement, or the USMCA, Trump's replacement for the North American Free Trade Agreement, or NAFTA, to move forward in the House.

House Speaker Nancy Pelosi, D-Calif., called the new agreement "much better than NAFTA" and argued changes negotiated by Democrats make the deal "infinitely better than what was initially proposed by the administration."

The news of the USMCA deal came on the heels of conflicting reports regarding trade talks between the U.S. and China.

Shortly before the start of trading, a report from the Wall Street Journal said the U.S. plans to delay imposing additional tariffs on Chinese goods.

Citing officials on both sides, the Journal said negotiators are laying the groundwork for delaying the tariffs set to kick in on December 15th as they continue to haggle over getting China to commit to massive purchases of U.S. farm products.

An earlier report from the South China Morning Post said a trade deal between the U.S. and China is unlikely to be completed this week.

However, the SCMP said sources close to the talks do not expect the tariffs planned for December 15th to take effect, adding to a growing chorus on both sides who expect de-escalation this week.

Traders also seemed reluctant to make significant moves ahead of the Fed's monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, although traders are still likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Contributing to the lackluster close by the broader markets, most of the major sectors ended the day showing only modest moves.

Biotechnology and gold stocks saw some strength on the day, while telecom and housing stocks moved to the downside.

Other Markets

In overseas trading stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index edged down by 0.1 percent, while China's Shanghai Composite Index inched up by 0.1 percent.

The major European markets also ended the day mixed. While the French CAC 40 Index rose by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index both fell by 0.3 percent.

In the bond market, treasuries showed a lack of direction before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.833 percent.

Looking Ahead

Trading on Wednesday may be driven by reaction to the Fed's monetary policy announcement, although a report on consumer price inflation may also attract some attention.

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