By Sagarika Jaisinghani
(Reuters) – U.S. stocks halted a three-day winning streak on Monday, as oil prices dived 2% and rising doubts over how quickly a partial U.S.-China trade deal announced on Friday could be sealed.
Energy majors such as Exxon Mobil Corp
The S&P 500 and Dow Jones indexes had ended Friday with their first weekly gain in a month after Washington signaled the two sides had taken a major step in easing the tit-for-tat measures that have hammered global growth this year.
Trump, however, acknowledged the agreement could still collapse and a handful of media reports and comments from Treasury Secretary Steven Mnuchin left investors feeling less upbeat about what had really been achieved.
Mnuchin said in a CNBC interview that he had “every expectation” that if a U.S.-China trade deal was not in place by Dec. 15, additional tariffs would be imposed, although he said he expected a deal to be agreed by then.
Shares of companies with a sizeable exposure to China, including Nvidia Corp
“It’s more of the fact that it was a handshake deal,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“On Friday, we closed off the highs of the day as investors began to realize that while on the surface this is good news, there’s no substance to the deal just yet.”
At 10:00 a.m. ET, the Dow Jones Industrial Average <.DJI> was up 6.03 points, or 0.02%, at 26,822.62, while the S&P 500 <.SPX> was down 2.35 points, or 0.08%, at 2,967.92. The Nasdaq Composite <.IXIC> was down 7.78 points, or 0.10%, at 8,049.26.
Investors will now be looking at third-quarter earnings to gauge the impact of the trade conflict and a sluggish domestic economy on corporate America.
The reporting season kicks off on Tuesday, with the biggest U.S. banks expected to report a 1.2% decline in earnings due to falling interest rates, a raft of unsuccessful stock market flotation and trade tensions.
Overall, analysts are forecasting a 3.2% decline in profit for S&P 500 companies for the quarter from a year earlier, based on IBES data from Refinitiv.
Shares of U.S. construction and engineering company AECOM
Declining issues outnumbered advancers for a 2.08-to-1 ratio on the NYSE and for a 2.07-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and two new lows, while the Nasdaq recorded nine new highs and 51 new lows.
(Additional reporting by Arjun Panchadar and Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)