WASHINGTON (dpa-AFX) - After coming under pressure early in the session, stocks showed a significant recovery attempt over the course of the trading session on Tuesday. The Dow and the Nasdaq briefly peeked above the unchanged line but ended the day modestly lower.
The major averages all closed in negative territory but well off their worst levels. The Dow edged down 23.33 points or 0.1 percent to 27,198.02, the Nasdaq slipped 19.71 points or 0.2 percent to 8,283.61 and the S&P 500 dipped 7.79 points or 0.3 percent to 3,013.18.
The initial weakness on Wall Street reflected concerns about U.S.-China trade talks after President Donald Trump lashed out at China in a series of posts on Twitter.
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 seemed 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.
Traders largely shrugged off today's batch of U.S. economic data, as nothing is expected to dissuade the Fed from cutting rates.
Early in the day, the Commerce Department released a report showing personal income and spending both rose in line with economist estimates in the month of June.
The National Association of Realtors and the Conference Board also released separate reports showing a bigger than expected jump in pending home sales and a substantial rebound in consumer confidence.
Sector News
Despite the modest losses posted by the major averages, energy stocks showed a substantial move to the upside following recent weakness. The rally by energy stocks came as the price of crude oil for September delivery jumped $1.18 to $58.05 a barrel.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index soared by 6.3 percent 4.7 percent, respectively.
Housing stocks also turned in a strong performance following the release of better than expected pending home sales data, with the Philadelphia Housing Sector Index jumping by 1.9 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.
On the other hand, interest rate-sensitive utilities stocks moved to the downside despite widespread expectations for an interest rate cut on Wednesday.
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 showed a lack of direction on the day 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 2.061 percent.
Looking Ahead
The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing reports on private sector employment and Chicago-area business activity.
On the earnings front, tech giant Apple (AAPL) is among the companies releasing their quarterly results after the close of today's trading.
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