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US stocks dip as investors digest mixed economic data and pause on US-China trade talks

Fed Reserve chairman Jerome Powell suggested the US central bank would be 'patient' when considering when to hike interest rates in a speech before the Senate's banking committee
Dow Jones
The Dow was weighed down by Caterpillar Inc's 3.3% fall after UBS double downgraded the company's stock to Sell on expectations of downward revisions to earnings

US stock markets dipped slightly on Tuesday, as investors paused on mixed economic data and corporate news in addition to waiting for news on US-China trade negotiations. 

Contributors included weaker-than-expected housing data and comments from the Federal Reserve chairman Jerome Powell who warned of slower economic growth.

The Dow Jones Industrial Average closed down 34 points, or 0.1%, at 26,057, with top laggards including Caterpillar Inc (NYSE:CAT), Home Depot Inc (NYSE:HD) and United Technologies Corp (NYSE:UTX).

Elsewhere, the tech-laden Nasdaq inched lower, down 5 points, or 0.07%, to finish at 7,549. Shares of specialty food company SunOpta (NASDAQ:STKL) dropped sharply, down 43% at US$2.31 after its president and CEO David Colo was terminated, alongside mixed fourth-quarter earnings results.

The S&P 500 fell slightly, down 0.1% to hit 2,793, while the Russell 2000 index of small-cap stocks droppd 0.7% at 1,577. 

In Canada, Toronto’s S&P/TSX Index closed flat, up 10 points or 0.07%, to reach 16,068 by the closing bell.

1:30 PM US stocks flatline as investors digest mixed comments from Fed chair

US stocks failed to find their footing in afternoon trade and swung between gains and losses in the wake of mixed comments from Federal Reserve chairman Jerome Powell who warned of slower economic  growth in an address to a Senate committee.

In prepared remarks, the chieftan of the US central bank said the Fed is keeping close tabs on the US economy and will alter monetary policy if required.

“Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier last year,” Powell said in his speech to the Senate Committee on Banking, Housing and Urban Affairs.

Soft economic data also influenced market sentiment, with investors responding poorly to a Commerce Department report which said homebuilding efforts in the US fell to a more than two-year low in December.

A weak round of earnings from Home Depot (NYSE:HD), which missed Wall Street’s consensus estimates, pushed shares in the home improvement retailer down 1.97% to $186.23.

Shares of Caterpillar (NYSE:CAT) also traded 2% lower to hit $138.39 after UBS slashed its price target on the stock to $125 from $154 and downgraded its shares to a Sell from a Buy rating.

At the time of writing, the Dow Jones Industrial Average index fell 11.5 points to 26,081, led lower by Caterpillar, Home Depot and JPMorgan Chase.

NXP Semiconductors NV, Sirius XM Holdings and Kraft Heinz Co all weighed on the tech-laden Nasdaq, meanwhile, which dropped 6.5 points or .09% to 7,547.

Elsewhere, the S&P 500 shed 0.03% to hover at 2,795 while the Russell 2000 index of small-cap stocks slipped by 9 points to hit 1,579.

Up in Canada, Toronto’s TSX bucked the trend and added 0.04% to 16,062, thanks to gains from industrial, consumer goods and healthcare companies.

10:00 am: Wall Street opens lower as cautious mood prevails ahead of Powell's testimony on monetary policy

Wall Street opened lower Tuesday weighed down by losses in shares of Caterpillar and a cautious mood prevailed ahead of Federal Reserve chairman Jerome Powell's testimony on monetary policy to the US Senate Committee, as he will be grilled during the Q&A session.

The Dow Jones Industrial Average fell 79.85 points, or 0.31% to 26,012.10, led lower by Walt Disney, Home Depot and UnitedHealth Group Inc. The Black Board was also weighed down by Caterpillar Inc's 3.3% fall after brokerage UBS double downgraded the company's shares to Sell on expectations of downward revisions to earnings.

Meanwhile, the S&P 500 was also in the red, hovering at 2,792.94, led lower by H&R Block, Tripadvisor and DISH Network Corp.

The Nasdaq Composite index which was down 20.38 points, tried to claw into the green and was hovering at 26,071.57.

Elsewhere, the Russell 2000 index of small-cap stocks traded flat at 1,587.73.

7.15 am: US shares are seen starting in red as traders await data and Fed testimony

US stocks are seen starting in the red Tuesday as European shares are also lagging and Asia fell overnight as traders await another round of data and central bank talk.

The Federal Reserve chairman Jerome Powell will be testifying before the Senate's banking committee.

Investors will also be keen this morning to pour over housing starts data for last month (December) and consumer confidence stats to see if any of it sheds more light on the state of the US  economy and the direction of travel.

On Monday, US stocks had a positive finish as sentiment was buoyed by optimism over a potential trade pact with China. The Dow Jones Industrial Average finished around 60 points up at 26,091.

The S&P 500 added around three points at 2,796, while the Nasdaq gained nearly 30 points at 7,554.

In US futures today, the Dow is down 98 points; the S&P 500 is 6.5 lower and the Nasdaq exchange is down around 22.

In London, the FTSE 100 is down around 86 points at 7,097. In Brexit world, which is becoming more convoluted by each passing day, UK Prime Minister Theresa May is said to be discussing with ministers a possible extension beyond March 29 - the date the UK is due to leave the bloc.

The German Dax is down around 35 at 11,470 and the French CAC 40 is off around 17.

In Toronto yesterday, the TSX gained around 44 points to stand at 16,057, while the venture exchange added around half a point.

In Asia, the Nikkei 225 lost nearly 79 points, while the Shanghai Composite index fell nearly 18 at 28,772.

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