WASHINGTON (dpa-AFX) - After showing an initial move to the downside, stocks have regained some ground over the course of the trading session on Tuesday. The major averages have climbed well off their worst levels of the day but remain in negative territory.
Currently, the major averages remain stuck in the red. The Dow is down 55.78 points or 0.2 percent at 27,165.57, the Nasdaq is down 32.07 points or 0.4 percent at 8,261.25 and the S&P 500 is down 10.94 points or 0.4 percent at 3,010.03.
The initial weakness on Wall Street came after President Donald Trump lashed out at China in a series of posts on Twitter, raising concerns about the latest round of U.S.-China trade talks.
Trump claimed there are 'no signs' that China is following through on plans to purchase U.S. agricultural products and suggested the Chinese are hoping to wait out the U.S. presidential election to get a better deal.
'China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so,' Trump tweeted.
'That is the problem with China, they just don't come through,' he added. 'My team is negotiating with them now, but they always change the deal in the end to their benefit.'
The tweets from Trump come as Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are in Shanghai this week to meet with their Chinese counterparts.
Selling pressure waned shortly after the start of trading, however, as traders seem reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday.
The U.S. economy is experiencing its longest expansion in history, but the Fed is still expected to cut interest rates by at least 25 basis points in a proactive move aimed at offsetting the negative effects of the U.S.-China trade war.
Trump has repeatedly urged the Fed to lower rates, claiming in a post on Twitter on Monday that the central bank 'has made all of the wrong moves.'
Assuming the Fed cuts rates as expected, traders are likely to pay close attention to the accompanying statement for clues about the potential for future rate cuts.
Sector News
Most of the major sectors have climbed off their early lows, although considerable weakness remains visible among tobacco stocks. Reflecting the weakness in the tobacco sector, the NYSE Arca Tobacco Index is down by 1.5 percent.
Pharmaceutical stocks also continue to see notable weakness in mid-day trading, dragging the NYSE Arca Pharmaceutical Index down by 1.1 percent.
On the other hand, oil service and natural gas stocks are rebounding following recent weakness, with the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index both jumping by 2.5 percent.
Housing stocks have also moved significantly higher following the release of better than expected pending home sales data, driving the Philadelphia Housing Sector Index up by 1.7 percent.
The National Association of Realtors said its pending home sales index surged up by 2.8 percent to 108.3 in June after jumping by 1.1 percent to 105.4 in May. Economists had expected pending home sales to rise by 0.5 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both rose by 0.4 percent, while Hong Kong's Hang Seng Index inched up by 0.1 percent.
Meanwhile, the major European markets came under pressure over the course of the session. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index tumbled by 1.6 percent and the German DAX Index plunged by 2.2 percent.
In the bond market, treasuries have moved modestly lower after initially showing a lack of direction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.072 percent.
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