U.S. stock indexes closed with mixed results Tuesday, shedding most of their gains from earlier in the day after a published report revealed that the first phase of a trade deal between the U.S. and China does not remove tariffs on Chinese goods.
The benchmark S&P 500 and the Nasdaq composite finished slightly off their record highs from a day earlier. The Dow Jones Industrial Average notched a slight gain. Small-company stocks rose.
The S&P 500 index fell 4.98 points, or 0.2%, to 3,283.15. The index had been up as much as 0.2% earlier. The Nasdaq slid 22.60 points, or 0.2%, to 9,251.33.
The Dow rose 32.62 points, or 0.1%, to 28,939.67. The Russell 2000 index of smaller-company stocks climbed 6.14 points, or 0.4%, to 1,675.74.
Bond prices rose. The yield on the 10-year Treasury slipped to 1.81% from 1.84% late Monday.
Technology stocks accounted for much of the selling. The sector is particularly sensitive to developments in trade relations because many of the companies rely on China for sales and supply chains.
Investors bid up shares in several big banks, including JPMorgan Chase and Citibank, after the companies reported surprisingly good quarterly results.
The market's late-afternoon burst of selling came a day before the U.S. and China were due to sign a first-phase trade agreement in Washington. Optimism that the deal will bring the two economic powerhouses closer to ending the dispute, which threatens global economic growth, has helped drive markets higher for weeks.
Still, reports suggesting that U.S. tariffs on Chinese goods will remain in place until at least after this year's election appeared to dim some investors' enthusiasm over the deal.
"Would the market be more satisfied with a reduction in those tariffs? Absolutely," said Quincy Krosby, chief market strategist at Prudential Financial. "Nonetheless, you don't want to have an escalation in the tariff war. That was the most important thing for the market."
President Donald Trump and China's chief negotiator, Liu He, are scheduled to sign the trade agreement that calls for the U.S. to ease some sanctions on China. The U.S. dropped its designation of China as a currency manipulator in advance of the signing.
Beijing, meanwhile, will step up its purchases of U.S. farm products and other goods.
With the trade issue entering a new stage, Wall Street is focusing on the rollout of corporate earnings reports over the next few weeks.
Several large banks were among the companies that kicked off the latest earnings season Tuesday.
JPMorgan Chase's shares rose 1.2% after the banking giant reported a surge in profits because of a blowout quarter from its trading desks. The earnings handily beat analysts' forecasts. Citigroup climbed 1.6% after reporting a similar jump in profits because of its trading operations.
Wells Fargo did not fare as well. The bank's stock slumped 5.4% as its profits and revenue dropped because of hefty costs and lower interest rates. Wells Fargo is still under growth restrictions imposed by regulators after the company's years of missteps, beginning in 2016 with the uncovering of millions of fake checking accounts its employees opened to meet sales quotas.
Delta Air Lines' stock rose 3.3% after the company increased its fourth-quarter profits to $1.1 billion by adding more flights over the holiday period and packing them full of passengers. The results beat Wall Street's forecasts.
Delta's solid report helped lift some of its rivals. United Airlines rose 1.1%, and American Airlines gained 0.5%.
Information for this article was contributed by Damian J. Troise of The Associated Press.
Business on 01/15/2020