Stocks - Trade Uncertainty Takes the Fizz out of Rally

Investing.com – Many investors want or expect stocks to move higher, but a little buyer reluctance took over the stock market on Wednesday.

The caution was caused in large part by news reports that the signing of a U.S.-China trade deal may be delayed until December, assuming a site for the signing can be chosen and the last details negotiated.

The S&P 500 finished up 2 points, and traded within a range of about 12.5 points. The Dow Jones industrials were basically flat at 27,492.56, and the Nasdaq Composite dropped 0.3% 8,410.63.

The number of stocks hitting 52-week highs fell to 117 on Wednesday from 285 on Tuesday.

The wrinkle in the trade deal was born out of Chile's decision to cancel the Asia-Pacific Economic Cooperation summit. It was to be held this month in Santiago, with President Donald Trump and Chinese President Xi Jinping to sign the trade deal at that time.

But local protests about economic conditions turned nasty, forcing the Trump Administration and Xi's government to work on finding a new site, possibly in Sweden or Switzerland.

The final details of what is expected to be the first of several agreements are still being negotiated. A key detail for China is for the U.S. to scrap tariffs, due in December, on $156 billion in goods including cell phones, laptop computers and toys. It also wants relief on tariffs imposed in September on goods including machinery, semiconductors and furniture.

So, the market stalled. The S&P 500 had risen 6.34% between Oct. 8 and its closing high of 3,078 on Monday, a fairly rapid rise, especially considering the index is up 22.7% on the year. Clearly, some traders saw the trade news and decided to wait.

What little excitement came on a Wall Street Journal report that Xerox (NYSE:XRX) might try to take over computer-maker HP Inc. (NYSE:HPQ), better known as simply Hewlett-Packard. HP was up 6.4%. Xerox rose 3.6%, both among the 10 biggest S&P 590 gainers on the day.

While 20 Dow stocks were higher, Boeing (NYSE:BA) was off 1.1%, and Walgreens Boots Alliance (NASDAQ:WBA) dropped 2.8% as excitement faded that the pharmacy giant might try to go private. One reason is that Stephen Schwarzman, CEO of Blackstone (NYSE:BX) Group called the idea "a stretch." Blackstone has been involved in many of the largest buyouts.

The declines for Boeing and Walgreens subtracted more than 39 points from the Dow on a day when Apple (NASDAQ:AAPL) was up 0.04% and Microsoft (NASDAQ:MSFT) slipped 0.28%.

Health, real estate, consumer staples and financial stocks were the market leaders. Energy shares were lower as oil prices fell in response to the trade-deal news.

Interest rates also moved lower with the United States 10-Year Treasury yield down to 1.821% from Tuesday's 1.865%. Gold was up $9.40 to $1,493.10 in New York as some investors looked for safe havens.

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Cosmetic company Coty (NYSE:COTY), health company DaVita HealthCare Partners (NYSE:DVA), Hewlett-Packard (NYSE:HPQ) and CVS Health (NYSE:CVS) were the S&P 500 leaders.

Diamondback Energy (NASDAQ:FANG), packaging company Sealed Air (NYSE:SEE), drugmaker Perrigo (NYSE:PRGO) and Occidental Petroleum (NYSE:OXY) were the S&P 500 laggards.