Stocks on Wall Street closed modestly lower Monday as losses in technology, healthcare and financial companies outweighed gains elsewhere in the market.
The selling snapped a three-day winning streak for the Standard & Poor’s 500 index and wiped out the benchmark index’s 0.2% gain from last week.
Trading was mostly muted as investors looked ahead to a busy week of economic reports and an interest rate policy update from the Federal Reserve.
The market also remained focused on developments in the U.S.-China trade negotiations.
Both countries have been working toward a limited “Phase 1” deal that investors hope can at least avert new U.S. tariffs on $160 billion of Chinese goods from kicking in Sunday. The tariffs would raise prices on key products, including cellphones and laptops, and threaten to affect consumers.
“With the deadline being Sunday, most people don’t think that new tariffs will be put in place, but they also don’t expect a Phase 1 [deal] to be signed this week,” said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 slipped 9.95 points, or 0.3%, to 3,135.96. The Dow Jones industrial average fell 105.46 points, or 0.4%, to 27,909.60. The Nasdaq fell 34.70 points, or 0.4%, to 8,621.83. The Russell 2000 index of smaller-company stocks retreated 4.22 points, or 0.3%, to 1,629.62.
Bond prices rose. The yield on the 10-year Treasury fell to 1.82% from 1.84%.
A Chinese official said Monday that the nation wants a prompt settlement of the trade war but gave no details on progress toward a potential deal. China made a conciliatory gesture last week when it said it would waive tariffs on American soybeans and pork.
Technology-sector stocks, which have been particularly sensitive to developments on trade because many of the companies rely on China for sales and supply chains, helped drag down the stock market Monday. Apple fell 1.4%, and chipmaker Micron Technology slid 3.1%.
Industrial stocks also fell. United Airlines declined 1.1%. General Electric fell 1%.
Abiomed led the slide in healthcare stocks, falling 4%. Banks fell as bond yields declined, with Goldman Sachs shares dropping 1.2%.
Several retailers helped lift the consumer discretionary stocks sector. Home Depot gained 1.1%, and its rival Lowe’s rose 1.4%. Target advanced 1.1%.
Traders also weighed several big healthcare deals.
ArQule shares more than doubled in price on news that Merck agreed to buy the small biotechnology company for $2.7 billion. ArQule is in the early stages of studying potential treatments for conditions including leukemia. Merck inched down 0.1%.
Sanofi made a similar play, spending $2.5 billion for San Diego-based Synthorx, which is also in the earlier stages of testing cancer treatments. Sanofi fell 1.6%. Synthorx nearly tripled.
Health insurer United HealthGroup said it is buying Diplomat Pharmacy to help bolster its pharmacy benefits unit, OptimRx. The deal is being made at a steep discount, which sent Diplomat’s stock plunging 32.7%. UnitedHealth dropped 0.9%.
PG&E leaped 15.9% following late Friday’s news that the California utility has reached a tentative $13.5-billion settlement that resolves all major claims related to the deadly, devastating Northern California wildfires of 2017 and 2018. The blazes were blamed on PG&E’s outdated equipment and negligence. The deal, which still requires court approval, represents a key step in PG&E’s exit from Chapter 11 bankruptcy.
Wall Street is in for a busy week of economic reports culminating in a key update on whether Americans are still spending at a healthy pace.
Investors will get a revised report Tuesday on worker productivity for the July-through-September quarter. Data released in November showed a decline for the first time since late 2015.
On Wednesday the government will release its November report for consumer prices, which have been rising at a modest rate this year. A gauge on producer prices will be released Thursday.
The Commerce Department’s report on retail sales due for release Friday is possibly the most important update this week. The economy has been propped up in part by solid spending and job growth.
Meanwhile, the Federal Reserve is scheduled to deliver an economic and interest rate policy update Wednesday after a two-day meeting of its policymakers. The central bank is widely expected to hold off on making any changes to interest rates.
“The market does not expect a rate cut in December but is probably still holding out for one or two in 2020,” Stovall said. “We think the Fed is going to sit pat and not really do anything.”
The Fed, which had raised interest rates four times in 2018, cut the rates three times this year in a bid to buttress economic growth. The Fed has signaled that it will hold off on any additional rate cuts while the economy remains healthy.
Benchmark crude oil fell 18 cents to settle at $59.02 a barrel. Brent crude oil, the international standard, fell 14 cents to close at $64.25 a barrel. Wholesale gasoline was little changed at $1.65 a gallon. Heating oil slipped a penny to $1.94 a gallon. Natural gas fell 10 cents to $2.23 per 1,000 cubic feet.
Gold fell 20 cents to $1,464.90 an ounce. Silver rose 5 cents to $16.53 an ounce. Copper rose 3 cents to $2.75 a pound.