By Amy Caren Daniel
(Reuters) – U.S. stocks fell on Thursday as investors turned risk averse in the run up to U.S.-China trade talks at the upcoming G20 Summit after President Donald Trump said there was "a long way to go" on tariffs with Beijing.
The dip in markets comes a day after all three major indexes rallied to close more than 2 percent higher on dovish tone from Federal Reserve Chair Jerome Powell. He said the policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy economy.
"The market is taking a bit of a pause after a significant rally yesterday and are in anticipation of the G20 Summit this week," said Art Hogan, chief market strategist at B. Riley FBR in New York.
"It's very difficult to make a prediction as to how the commentary out of G20 might go. When you don't know, you tend to take a risk-off stance."
President Donald Trump's uncompromising tone before he is set to meet his Chinese counterpart Xi Jinping at the Summit indicates that the meeting could ease or worsen the trade war between two of the world's largest economies.
Ten of the 11 major S&P 500 sectors were in the red, with trade-sensitive industrial stocks (SPLRCI) down 0.2 percent.
Chipmakers, which get a large portion of their revenue from China, and shares of U.S.-listed Chinese stocks also fell and pushed the high-valued technology sector (SPLRCT) 0.51 percent lower.
At 9:47 a.m. EDT the Dow Jones Industrial Average (DJI) was down 47.35 points, or 0.19 percent, at 25,319.08, the S&P 500 (SPX) was down 7.35 points, or 0.27 percent, at 2,736.44 and the Nasdaq Composite (IXIC) was down 21.00 points, or 0.29 percent, at 7,270.59.
U.S. 10-year Treasury yields (US10YT=RR) fell to 3 percent, its lowest level since mid-September. Shares of the interest-rate sensitive financials sector (SPSY) fell 0.30 percent, weighed down by losses in U.S. lenders.
JPMorgan Chase & Co (N:JPM), Goldman Sachs Group Inc (N:GS) and Morgan Stanley (N:MS) fell between 0.3 and 1.2 percent.
Nielsen Holdings Plc (N:NLSN) gained 3.2 percent after a report that the TV ratings company received buyout interest from a private equity group Madison Dearborn.
McDonald's Corp (N:MCD) rose 0.9 percent after brokerage Morgan Stanley upgraded stock to "overweight", saying the fast-food chain's store modernization efforts will pay off in 2019.
Data showed U.S. consumer spending in October increased by the most in seven months, but underlying price pressures slowed, with an inflation measure tracked by the Fed recording its smallest annual increase since February.
The Federal Open Market Committee is scheduled to release the minutes from its Nov. 7-8 policy meeting at 2:00 p.m. ET (1900 GMT).
Advancing issues outnumbered decliners by a 1.00-to-1 ratio on the NYSE and a 1.02-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and one new low, while the Nasdaq recorded 16 new highs and nine new lows.