Stocks finished lower Tuesday as Chinese officials refused to confirm President Trump’s comments that the two countries are “getting back to the table.” The Dow fell 120 points, while the S&P 500 and Nasdaq Composite both lost 0.3%.
Treasuries strengthened with the yield on the 10-year note dropping six basis points to 1.48%. The significant drop in the 10-year rate leaves the Treasury yield curve inverted with two-year note trading at 1.52%. The yield on the 30-year bond also garnered attention falling below the S&P 500 dividend yield for the first time since 2009.
Ten of 11 S&P 500 sectors declined with Financial stocks leading the retreat. In corporate news, Johnson and Johnson rose 1.4% after an Oklahoma judge ordered the drugmaker to pay a significantly lighter fine than expected in the opioid trial. Philip Morris lost 7.8%, while Altria was down 4.0% on news the two companies are discussing an all-stock merger. In earnings, J.M. Smucker slid 8.2% after its quarterly figures disappointed Wall Street analysts.
On the data front, a report showed consumer confidence largely surpassed expectations, dipping to 135.1 in August from 135.8 last month, which had been the highest reading since November. The S&P CoreLogic Case Shiller release revealed home prices in its 20-City Composite increased at a 2.1% annualized pace in June, down from the prior period’s 2.4% gain. An update from the Richmond Fed showed manufacturing activity in the region improved this month. In commodities, WTI crude jumped 2.5% to $54.98/barrel, while COMEX gold gained 1.0% to $1,541.00/ounce.
