Stocks Pare Losses on U.S.-Mexico-Canada Trade Pact

By Anna Isaac and Akane Otani 

U.S. stocks were roughly flat Tuesday afternoon, paring earlier losses after Democratic lawmakers reached an agreement with the Trump administration to support a trade deal with Mexico and Canada.

The Dow Jones Industrial Average was nearly unchanged. The S&P 500 lost less than 0.1% and the Nasdaq Composite edged up less than 0.1%.

Tuesday's trading day unfolded quietly, even as a flurry of news caught traders' and analysts' attention. Stock futures had initially climbed after The Wall Street Journal reported that U.S. and Chinese trade negotiators were looking to delay a fresh round of tariffs. But then they erased some of their gains heading into the opening bell after House Democrats announced two articles of impeachment against President Trump.

Markets then drifted off their lows after House Democrats said they reached an agreement with the Trump administration on a trade deal with Mexico and Canada.

Developments from Washington, as well as news on trade, could spur further volatility in the markets heading into year-end, analysts say.

Chinese and U.S. officials involved in the talks to postpone tariffs on $165 billion of Chinese goods that are set to kick in on Dec. 15 say they don't have a hard deadline for an initial deal.

"A lot of different options are still on the table. We just don't know what's going to happen," said Oliver Jones, market economist at Capital Economics. "At one end of the spectrum, there's a deal and the tariffs rollback. But just last week we had Trump's remarks that there might not be a deal until after the election."

Declines among technology companies weighed on major indexes, with Netflix down 2.9% after Needham analysts downgraded the stock to "underperform" from "hold."

Deal news also drove swings among individual stocks.

Shares of NortonLifeLock climbed 3.3% after the Journal reported that the consumer-software company has attracted deal interest from a range of companies including rival McAfee.

Elsewhere, the Stoxx Europe 600 dropped 0.3%, while the U.K.'s FTSE 100 index dropped 0.3%. Britain is preparing to head to the polls Thursday for a crucial election.

Meanwhile, Federal Reserve officials were kicking off their final two-day policy meeting of the year Tuesday. Officials are widely expected to decide to hold steady on interest rates after lowering their benchmark rate three times since July to try to cushion the U.S. economy against a slowdown in global growth.

Write to Anna Isaac at [e-mail] and Akane Otani at [e-mail]

(END) Dow Jones Newswires

December 10, 2019 16:05 ET (21:05 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.