NEW YORK (Aug 8): U.S. stocks were flat on Wednesday after China retaliated to Trump administration's latest tariffs, escalating trade tensions and muting strong corporate earnings.
China said it was slapping additional import tariffs of 25% on US$16 billion worth of U.S. goods, responding in equal measure to the United States' new round of tariffs.
The S&P 500 index slipped after coming within spitting distance of a record high, following a four-day rise.
The energy group dropped 0.75% and weighed the most on the S&P index as crude oil prices fell on slowing Chinese demand and trade issues.
The industrial index fell 0.3% as a drop in shares of trade-sensitive stocks such as Boeing and Caterpillar dragged.
However, the healthcare sector got a boost from a 3.6% gain in CVS Health and a 2.8% rise in Aetna. CVS beat analysts' estimates for adjusted quarterly profit, as it sold more prescription drugs at its stores.
With the second-quarter earnings season winding down, 79% of S&P 500 companies have topped estimates. If the beat rate holds, it will be the highest on record, dating back to the first quarter of 1994, according to Thomson Reuters I/B/E/S.
"When we see the earnings growth in 2018, the multiples are reasonable at that record level," said Art Hogan, chief market strategist at B. Riley FBR in New York. "We're in a better place in getting to that record high than we were in January,"
At 9:53 a.m. EDT the Dow Jones Industrial Average was down 38.77 points or 0.15% at 25,590.14; the S&P 500 was down 2.83 points or 0.10% at 2,855.62; and the Nasdaq Composite was down 7.72 points or 0.10% at 7,875.95.
Seven of the 11 major S&P sectors were lower.
Walt Disney fell 1.2% and was the biggest decliner on the bluechip Dow, after its quarterly profit missed estimates.
Mylan's 6.8% drop was the most on the benchmark S&P 500, after the drugmaker reported quarterly results and said it was actively evaluating a "wide range of alternatives".
Michael Kors gained 7.5%, after the fashion house topped Wall Street forecasts for quarterly profit and revenue and raised its full-year earnings forecast.
Declining issues outnumbered advancers for a 1.55-to-1 ratio on the NYSE and for a 1.20-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and two new lows, while the Nasdaq recorded 42 new highs and 27 new lows.