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Stocks - Wall Street Drops Ahead of Fed, Tariff Deadline

Investing.com - Stocks moved lower on Monday ahead of a Federal Reserve meeting this week and on worries about U.S.-China trade talks.

The S&P 500 dropped 0.32%. The Dow Jones industrials slid 0.38%, and the Nasdaq Composite index fell 0.40%.

The pullback was probably to be expected after Friday's big rally triggered by the bullish November jobs report.

The declines, including 105 points on the Dow, were enough to push the major indexes into the red for December. Still, the stock market is enjoying its best year since 2013.


The Fed will hold its last meeting of the year starting Tuesday. The two-day affair will end Wednesday afternoon with the announcement. Investors tracked by Investing.com are overwhelmingly betting on the Fed standing pat on the key fed rate of 1.5% to 1.75%.

The meeting will begin two days after the Sunday death of former Fed Chairman Paul Volcker at age 92.

The trade issue at hand is what happens if the United States and China can't come to a phase one agreement by Sunday night and if President Donald Trump will impose a new round of tariffs on goods imported from China, including cellphones and other electronics.

Larry Kudlow, Trump's economic advisor, said the Sunday deadline was not arbitrary, and there's some betting in Washington that the new tariffs won't be imposed, but tariffs imposed in the fall will be left in place.

What's not clear is how long can either side hold until it says "no mas." A reason for Monday's decline was an overnight report that Chinese exports in November were down 1.1% from October. Investors were expecting a small gain.

A last concern is the outcome of Thursday's general election in the United Kingdom and what it might mean for Brexit.

The China concerns weighed on tech and tech-related shares. Apple (NASDAQ:AAPL), Goldman Sachs (NYSE:GS) and Boeing (NYSE:BA) were the weakest Dow stocks, with Home Depot (NYSE:HD) and IBM (NYSE:IBM) the leaders.

The 11 S&P 500 sectors fell back with only consumer staples, consumer discretionary and real estate stocks higher.

The weakest sectors were healthcare and utilities. UnitedHealth Group (NYSE:UNH), the health-insurance giant, fell nearly 1%. Humana (NYSE:HUM) was off 1.7%.

After hours, luxury home builder Toll Brothers (NYSE:TOL) shares were rising after the company's fourth-quarter earnings and revenue beat estimates. And the company guided higher.

Also higher was apparel company Stitch Fix (NASDAQ:SFIX) after a revenue-and-earnings beat.

Freeport-McMoran Copper & Gold (NYSE:FCX), retailers Nordstrom (NYSE:JWN) and Kohl's (NYSE:KSS) and oil-and-gas producer Apache (NYSE:APA) were among the top-performing S&P 500 stocks on Monday.

International Flavors & Fragrances (NYSE:IFF), Ulta Beauty (NASDAQ:ULTA), Seagate Technology (NASDAQ:STX) and Micron Technology (NASDAQ:MU) were among the weakest S&P 500 stocks.


Crude Oil WTI Futures were off modestly on the day, as was gold. The United States 10-Year Treasury yield fell to 1.833% from Friday's 1.843%.

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