US STOCKS-Wall St gains fade as U.S.-China trade concerns linger

  • Reuters
  • Stock Market News
US STOCKS-Wall St gains fade as U.S.-China trade concerns linger
Credit: © Reuters.

* Trump says "not yet ready" to make a deal with China

* Bond yields hit lowest since 2017

* Total System jumps after Global Payments' buyout offer

* Activision Blizzard gains on Goldman upgrade

* Dow down 0.36%, S&P 500 down 0.41%, Nasdaq down 0.11% (Updates to mid-afternoon, changes byline)

By Chuck Mikolajczak

NEW YORK, May 28 (Reuters) - U.S. stocks gave up early gains on Tuesday, with the Dow and S&P 500 moving into negative territory, as the likelihood of a protracted trade war between the United States and China kept investor enthusiasm for stocks in check.

U.S. President Donald Trump on Monday said he was "not yet ready" to make a deal with China, although he expected one could be reached in the future. An expanding tariff battle between the two sides has raised concerns the trade war would lead to a global economic slowdown.

"The market is trying to keep this momentum going but there is a lack of upside catalysts and there still are and I don't know what is going to drive this higher," said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE: SCHW ) in Austin, Texas.

"Any time the buyers step in, the excitement just kind of wears off and fizzles by the end of the day, and we're seeing that again today."

The uncertainty has pushed investors toward safe-haven assets, which resulted in benchmark 10-year U.S. Treasury yields US10YT=RR dropping to their lowest since October 2017, while the spread between the 10-year and 3-month bills US3MT=RR narrowed to nearly a 12-year low. majority of S&P sectors were in the red, with only communication services .SPLRCL on the plus side.

The benchmark S&P 500 index .SPX as of Friday's close was about 4% away from a record high reached on May 1, while the blue-chip Dow Jones Industrial index .DJI declined for a fifth straight week, its longest weekly losing streak in eight years.

The tech sector, which is down about 7% this month, also gave up early gains and turned negative despite a boost from a 4.98% jump in Total System Services Inc (NYSE: TSS ) TSS.N .

Global Payments Inc GPN.N said it would buy the payment technology company for about $21.5 billion in stock. Its shares declined 2.99%. addition, Advanced Micro Devices AMD.O shares surged 10.45% after the company unveiled new chips to battle for market shares with Intel INTC.O , which fell 2.50%.

The Dow Jones Industrial Average .DJI dropped 91.86 points, or 0.36%, to 25,493.83, the S&P 500 .SPX lost 11.53 points, or 0.41%, to 2,814.53 and the Nasdaq Composite .IXIC declined 8.08 points, or 0.11%, to 7,628.93.

Among other stocks, Activision Blizzard Inc ATVI.O rose 2.53% after Goldman Sachs (NYSE: GS ) upgraded its shares to "buy" and said the videogame publisher would benefit from its recent releases.

FedEx Corp (NYSE: FDX ) FDX.N slipped 0.59% after Huawei Technologies Co Ltd HWT.UL said it is reviewing its relationship with the U.S. package delivery company, after it diverted two parcels destined for Huawei addresses in Asia to the United States. issues outnumbered advancing ones on the NYSE by a 1.46-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.

The S&P 500 sported 17 new 52-week highs and 14 new lows; the Nasdaq Composite had 52 new highs and 103 new lows.

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