Wall Street erases early gains as trade cheer fades

NEW YORK: The wind fell out of Wall Street's sails in midday trading Tuesday as fading optimism about US-China trade talks erased early gains in stock prices.

The Dow Jones Industrial Average was down about 0.3 percent to 25,827.29 around 1610 GMT, a similar loss as the tech-heavy Nasdaq which fell to 7,833.15.

The broader S&P 500 dropped 0.2 percent to 2,871.95.

Chris Low of FTN Financial said investors were absorbing the reality that, despite President Donald Trump's rosy forecasts Monday about chances for a trade deal, the two sides were in fact no closer.

"We've been barraged by comments from the Chinese side that nothing has changed," he told AFP.

He also pointed to unhappy economic news out of Germany, where the economy contracted in the second quarter.

Among individual companies, US health care giant Johnson & Johnson was up 2.2 percent the day after an Oklahoma judge found the company liable in that state's opioid crisis but ordered it to pay only $572 million, far less than officials had asked for.

JM Smucker plunged 9.1 percent after underwhelming quarterly results and lower earnings guidance for 2020.

Tobacco maker Philip Morris International lost 4.2 percent after announcing the start of merger talks with its former parent company, US firm Altria Group, which wiped away early gains, falling 1.8 percent.

Meanwhile, a survey of US consumer confidence fell less than expected for August, showing continued optimism about the economy.