By Yashaswini Swamynathan
REUTERS - U.S. stocks fell in late afternoon trading on Thursday, after edging up briefly, as investors turned wary following President Donald Trump's latest protectionist comments.
Trump in a meeting with key lawmakers said he would like to speed up talks to either renegotiate or replace the North American Free Trade Agreement (NAFTA).
Investors are also assessing possible consequences of Trump's other comments, including labeling a refugee swap agreement with staunch ally Australia as a "dumb deal" and putting Iran "on notice" for firing a ballistic missile.
U.S. equities had enjoyed a frenetic post-election rally on bets that Trump would usher in an era of growth, stimulating the economy through tax cuts, simpler regulations and higher infrastructure spending.
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However, the rally has been unraveling in the past weeks as Trump's priorities, such as imposing restriction on travel to the United States and withdrawing from a trade deal, have caused uncertainty and made it hard for investors to have conviction in the equity market.
"What you have is a tug-of-war between near-term positives in terms of economic data and earnings season juxtaposed against the confusion over what's important in the first 100 days of the new administration and when will we get to see things like tax reforms," said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.
Earnings of S&P 500 companies are estimated to have risen 7.5 percent - the best growth in nine quarters, according to Thomson Reuters I/B/E/S.
Economic data has also been strong, with a report on Thursday showing a much bigger-than-expected drop in jobless claims last week. The next data point on investors' minds is the monthly nonfarm payrolls report due Friday.
Still, the Federal Reserve left interest rates unchanged on Wednesday, likely awaiting more clarity on Trump's fiscal policies.
At 12:30 p.m. ET (1730 GMT), the Dow Jones Industrial Average was down 32 points, or 0.16 percent, at 19,858.94, the S&P 500 was down 2.11 points, or 0.09 percent, at 2,277.44 and the Nasdaq Composite was down 10.39 points, or 0.18 percent, at 5,632.26.
The S&P 500 is on track to fall for the fifth time in six sessions.
Six of the 11 major S&P sectors were lower, with financials and technology dragging down the broader index.
Consumer staples and real estate, considered defensive plays in the market, were the top gainers.
Philip Morris rose 3 percent following the cigarette maker's results. The stock gave the biggest boost to consumer staples, followed by Mead Johnson that jumped 21.8 percent after Reckitt Benckiser said it was in advanced talks to buy the company for $16.7 billion.
Ralph Lauren dropped 11.4 percent. The company said Chief Executive Officer Stefan Larsson would leave following differences with the company's founder and chairman.
Results from a clutch of companies, including Amazon.com, Visa and Amgen, are expected to keep investors busy after markets close.
Advancing issues outnumbered decliners on the NYSE by 1,470 to 1,343. On the Nasdaq, 1,535 issues fell and 1,203 advanced.
The S&P 500 index showed 15 new 52-week highs and five new lows, while the Nasdaq recorded 62 new highs and 19 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)
Disclaimer: No Business Standard Journalist was involved in creation of this content
