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published on December 9, 2019 - 1:19 PM
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(AP) — Stocks are closing broadly lower on Wall Street as the market gives back some of its gains from last week. Technology and health care stocks accounted for much of the selling. Those losses outweighed gains in companies that rely on consumer spending, among others. The market pullback comes as investors wait for new developments in the trade negotiations between Washington and Beijing. The S&P 500 fell 9 points, or 0.3%, to 3,135. The Dow Jones Industrial Average fell 105 points, or 0.4% to 27,909. The Nasdaq lost 34 points, or 0.4%, to 8,621. Bond prices rose, sending yields lower.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. stock indexes edged lower in afternoon trading Monday, placing the market on track to give back some of its gains from last week.

Technology and health care stocks accounted for much of the selling. Those losses outweighed gains in companies that rely on consumer spending , among others.

The market’s pullback came as investors waited for the latest updates about trade negotiations between Washington and Beijing. Wall Street is particularly focused on developments in the trade war ahead of a new round of tariffs on $160 billion of Chinese imports due to take effect on Sunday.

That would raise prices on key products, including cell phones and laptops, and threaten to affect consumers.

A Chinese official said Monday that the nation wants a prompt settlement, 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.

The U.S. and China have been working toward a limited “phase 1” deal that investors hope can at least avert the new U.S. tariffs from kicking in on Chinese goods at the end of this week.

“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.

Technology sector stocks have been particularly sensitive to developments on trade because many of the companies rely on China for sales and supply chains. Apple fell 1.3% and chipmaker Micron Technology slid 2.8%.

Industrial stocks also fell. United Airlines dropped 1.3% and General Electric fell 1.1%.

Abiomed led the slide in health care stocks, sliding 4.4%.

The yield on the 10-year Treasury fell to 1.82% from 1.84% late Friday.

Banks fell as bond yields declined. Goldman Sachs dropped 0.9%.

Several retailers helped lift the consumer discretionary stocks sector. Home Depot gained 1.3% and rival Lowe’s rose 1.4%. Target also picked up 1.4%.

KEEPING SCORE: The S&P 500 index fell 0.2% as of 3:30 p.m. Eastern time.

The Dow Jones Industrial Average slid 57 points, or 0.2%, to 27,957. The Nasdaq fell 0.2%. The Russell 2000 index of smaller company stocks slipped 0.1%.

Major stock indexes in Europe closed broadly lower.

BIG PHARMA GOES SHOPPING: Several old-guard drug developers made billion-dollar purchases to beef up their development of potential cancer treatments.

Merck is spending $2.7 billion for ArQule, a small biotechnology company that is still in the earlier stages of studying potential treatments for conditions including leukemia. ArQule’s stock doubled following the announcement and Merck fell slightly.

Sanofi is making a similar play, spending $2.5 billion for Synthorx, which is also in the earlier stages of testing treatments. Sanofi fell 1.5% and Synthorx more than doubled.

DISCOUNT DRUGS: Health insurer United Health Group 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 32.4%. UnitedHealth slipped 0.4%.

SETTLEMENT BUMP: PG&E surged 17.3% 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 2017-2018. 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.

WEEK AHEAD: 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 on worker productivity for the July-September quarter on Tuesday. 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 on Thursday.

The Commerce Department’s report on retail sales coming up Friday is possibly the most important update this week. The economy has been propped up in part by solid spending and job growth.

FED WATCH: The Federal Reserve is meeting this week to discuss monetary policy but is widely expected hold off on making any changes. The central bank has cut interest rates three times this year in a sharp reversal from 2018 in an effort to buttress economic growth.

The rate cuts have injected more confidence into the market. The Fed has signaled that it will hold off on any additional rate cuts as long as the economy remains healthy.


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