Stocks end mostly lower after early rally fades

Stocks on Wall Street closed slightly lower Wednesday after an early rally — fueled by optimism over the next round of U.S.-China trade talks — lost momentum toward the end of the day.

The wobbly finish extended the Standard & Poor’s 500 index’s losing streak to a fourth straight day, though the market is still on track to end the month with solid gains.

Losses by healthcare stocks, consumer goods makers and utilities offset solid gains by technology companies.

Stocks climbed in the morning after U.S. Treasury Secretary Steven T. Mnuchin told CNBC that a trade deal between the United States and China was “about 90%” done during recent negotiations. President Trump and Chinese President Xi Jinping are scheduled to meet at the Group of 20 summit this weekend in Japan, and investors hope that talks will yield progress toward an agreement to resolve the costly trade war.

Initial optimism over the possibility of progress on trade helped drive up technology stocks, particularly chipmakers. The sector is especially vulnerable to trade disruptions with China, the world’s second-largest economy.

The rally began to fade, however, as other sectors piled up losses.

“The market has pulled back its expectations in terms of when an agreement will be signed and is just focusing on whether or not they can continue on a viable path toward constructive negotiations,” said Quincy Krosby, chief market strategist at Prudential Financial.

The S&P 500 ended down 3.60 points, or 0.1%, at 2,913.78. The Dow Jones industrial average slipped 11.40 points, or less than 0.1%, to 26,536.82. The Nasdaq composite, heavily weighted with technology stocks, rose 25.25 points, or 0.3%, to 7,909.97. The Russell 2000 index of smaller-company stocks fell 3.26 points, or 0.2%, to 1,517.78.

The market is on track to end June with solid gains that have reversed most of the losses from May’s big sell-off. Investors pushed stocks higher much of this month as they welcomed indications from the Federal Reserve that it will cut interest rates to keep the economy growing. The trend sent the benchmark S&P 500 to an all-time high last week.

Worries of an economic slowdown have also prompted traders to shift money into less risky assets, such as U.S. government bonds and gold, which is on track for a 7.8% gain this month.

The trade disputes between the U.S. and other nations, most prominently China, remain the biggest source of uncertainty looming over Wall Street.

This week’s G-20 meeting will be Trump’s and Xi’s first opportunity to discuss their differences on trade face to face since Trump said he was preparing to target the $300 billion in Chinese imports that he hasn’t already hit with tariffs, extending the duties to everything China ships to the United States.

“The market does not want to see that they leave the G-20 meeting and there’s no hope, no chance for negotiations,” Krosby said.

The two sides are in a stalemate after 11 rounds of talks that have failed to overcome U.S. concerns over China’s acquisition of American technology and its massive trade surplus. China denies forcing U.S. companies to hand over trade secrets and says the surplus is much smaller than it appears once the trade in services and the value extracted by U.S. companies are taken into account.

How the trade war develops could affect whether central banks move to support their economies. Fed Chairman Jerome H. Powell said this week that the economic outlook has become cloudier since early May amid uncertainty over trade and global growth. The Fed and the European Central Bank have indicated they are open to cutting interest rates if needed.

Investors are worried the fallout from the tariffs could hurt global economic growth and corporate profits. Analysts are projecting that second-quarter earnings for S&P 500 companies will be down 1.2%, according to FactSet.

“You’re headed into earnings season, and there are real questions about what is the second-quarter story going to have been in the face of what’s turning into a pretty tough environment,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “The unanswered question for us is: Are tariffs worse than people think or not? Is the Fed having to help out because things are a little worse than we expected?”

Healthcare stocks were the biggest drag on the market Wednesday, with drugmakers leading the way down. Eli Lilly slid 3.5%. Nektar Therapeutics declined 3.8%.

Consumer products firms were also big decliners. General Mills slumped 4.5% after the packaged foods maker reported weak sales trends in North America. The stock was the biggest loser in the S&P 500.

Even after losing some strength, tech firms led the gainers. Micron Technology jumped 13.3%, the biggest gain in the S&P 500, after the chipmaker forecast improved demand for smartphone chips the rest of the year. Other chipmakers also rose. Advanced Micro Devices gained 3.7%. Nvidia climbed 5.1%.

Energy stocks rose along with the price of U.S. crude oil. Hess gained 5.1%. ConocoPhillips gained 5%.

Benchmark crude oil rose $1.55 to $59.38 a barrel. Brent crude, the international standard, rose $1.44 to $66.49 a barrel.

The televised Democratic presidential candidate debates Wednesday and Thursday evenings may weigh on healthcare stocks. Many of the candidates have been arguing for expanding Medicare to cover uninsured Americans of all ages or some other form of universal healthcare coverage that would run counter to the current private insurance market.

“If ‘Medicare for All’ does not get a lot of air time or if other candidates criticize the proposal, we think that will be a positive for the market,” Raymond James analyst Chris Meekins wrote in a research note Wednesday.

Several healthcare providers fell Wednesday before the first debate. UnitedHealth Group lost 1.7%. Anthem fell 2.2%. Centene slid 3.5%.

Wholesale gasoline rose 10 cents to $1.97 a gallon. Heating oil rose 5 cents to $1.97 a gallon. Natural gas fell 2 cents to $2.29 per 1,000 cubic feet.

Gold rose $1.60 to $1,413.30 an ounce. Silver rose 99 cents to $15.28 an ounce. Copper fell 3 cents to $2.71 a pound.