US stocks winning streak ends amid angst over trade

VIDEO: REUTERS

NEW YORK (AFP) - Wall Street's four-session winning streak ended with a thud on Tuesday (Jan 22) amid revived worries over US-China trade relations and a sense the January rally is fading.

The Dow Jones Industrial Average dropped finished down 1.2 per cent at 24,404.48.

The broad-based S&P 500 dropped 1.4 per cent to 2,632.90, while the tech-rich Nasdaq Composite Index tumbled 1.9 per cent to 7,020.36.

Stocks were in the red the entire session, a shift from the trend since late December, when investors loaded up on equities after a sell-off earlier that month.

But many analysts now feel the market could be primed for another pullback after four weeks of nearly unbroken gains.

Wall Street had started Tuesday in a gloomy mood a day after the International Monetary Fund had trimmed its global growth forecasts, citing US-China trade uncertainties, Brexit and other factors.

Adding to that unease on Tuesday were afternoon reports in The Financial Times and CNBC that the United States had rejected Beijing's offer to hold a preparatory meeting in Washington ahead of next week's high-level trade talks.

The White House denied the report shortly before the closing bell, lifting stocks a bit but not enough to push them into positive territory.

Among individual companies, Johnson & Johnson dropped 1.4 per cent after projecting 2019 sales and profits below analyst expectations. The company, which is embroiled in lawsuits alleging cancer links to its talcum powder, reported a jump in litigation costs.

Aluminium parts company Arconic sank 16 per cent after it ended plans to potentially sell itself. The company had reportedly been in talks to be acquired by Apollo Global Management for more than US$10 billion (S$13 billion).

EBay surged 6.1 percent amid speculation it could break up as it faces pressure from shareholders.

Activist fund Elliott Management, which owns four percent of the company, released a letter calling for an overhaul of the company's operations and "substantial" shareholder payouts.