Dips in Facebook and Apple leave Wall Street lower

Shares of Facebook fell after a report that a federal probe on the data breach linked to Cambridge Analytica had been broadened.

NEW YORK (REUTERS) - Wall Street dipped on Tuesday (July 3), weighed down by Apple, Facebook and other technology stocks, in a trading session ending early ahead of the US July 4 holiday.

Facebook dropped 2.35 per cent after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica was broadened and will include more government agencies.

The dip in the social media company's stock, along with a 1.7 per cent slide in Apple, weighed on the S&P technology sector , which fell 1.37 per cent.

Energy stocks held onto gains even after crude oil prices reversed course shortly after the market opened as traders booked profits.

Trade tensions continued to fester, with US President Donald Trump on Monday making a veiled threat against the World Trade Organisation. Also looming is a July 6 deadline when Washington is set to impose tariffs on US$34 billion (S$46 billion) worth of Chinese goods.

"In the short term, company fundamentals are quite solid and the economy is strong," said Brant Houston, managing director at CIBC Private Wealth Management.

"But with the trade war looming there is a lot of uncertainty and a lot of unknowns. Until we get more clarity there it is difficult for investors to jump back into the equity market."

Shares of American Airlines, United Continental and Delta Air Lines fell between 1 per cent and 2.28 per cent after Deutsche Bank downgraded all three stocks saying the growing US-China trade dispute could weigh on their results.

The Dow Jones Industrial Average declined 0.54 per cent to end at 24,174.82 points, while the S&P 500 lost 0.49 per cent to 2,713.22.

The Nasdaq Composite dropped 0.86 per cent to 7,502.67.

With US exchanges closing at 1pm ET ahead of the July 4 holiday, volume was 3.9 billion shares, compared to the 7.1 billion average over the last 20 trading days.

As well as a day off, traders were looking toward June unemployment data due out on Friday for a glimpse of the how much the labour market may be tightening, and for potential price pressure.

"Investors would rather take a wait-and-see attitude until we get a bit more data with those jobs numbers on Friday, and then move into earnings," said Jeff Kravetz, a regional investment strategist at US Bank Wealth Management.

Tesla fell 7.2 per cent, declining for the second straight session on questions over whether it could sustain the pace of making its Model 3 sedans.

Economic data was mixed. New orders for US-made goods unexpectedly rose in May, pointing to a strengthening manufacturing sector, but business spending on equipment continued to show signs of slowing.

Advancing issues outnumbered declining ones on the NYSE by a 1.74-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favoured advancers.

The S&P 500 posted eight new 52-week highs and three new lows; the Nasdaq Composite recorded 75 new highs and 36 new lows.