(RTTNews.com) - After failing to sustain an early move to the upside, stocks came under pressure over the course of the trading session on Monday. The major averages pulled back well off their best levels of the day and into negative territory.
While the major averages regained some ground going into the close, they remained firmly in the red. The Dow slumped 245.39 points or 1 percent to 24,442.92, the Nasdaq tumbled 116.92 points or 1.6 percent to 7,050.29 and the S&P 500 fell 17.44 points or 0.7 percent to 2,641.25.
The sharp pullback by stocks came after report from Bloomberg said the U.S. is preparing to announce tariffs on all remaining Chinese imports if next month's talks between Presidents Donald Trump and Xi Jinping fail to ease the trade war.
Citing three people familiar with the matter, Bloomberg said the announcement of the new round of tariffs could come by early December
Two of the people told Bloomberg the new tariffs would apply to Chinese imports that aren't already covered by previous rounds of tariffs, or approximately $257 billion worth of goods.
The report from Bloomberg comes as Trump and Xi are expected to meet on the sidelines of a Group of 20 summit in Buenos Aires, Argentina, beginning November 30th.
Shortly before imposing tariffs on $200 billion worth of Chinese goods in September, Trump threatened to levy duties on nearly everything China exports to the U.S.
The early strength on Wall Street came as some traders picked up stocks at reduced levels following the steep drop seen last week, extending the see-saw performance seen over the past few sessions.
Auto stocks helped to lead the way higher after a report from Bloomberg said China is considering cutting a tax on car purchases in half.
The proposal to lower the purchase tax to 5 percent from 10 percent comes as Chinese car sales are on track for their first annual drop in two decades amid the U.S.-China trade war.
News on the merger-and-acquisition front also generated some buying interest, with IBM Corp. (IBM) agreeing to acquire Linux software distributor Red Hat (RHT) for $33 billion in cash.
Buying interest waned over the course of the morning, however, with political uncertainty in Europe limiting the upside for the markets.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing personal income rose by slightly less than expected in the month of September.
Oil service stocks bucked the early uptrend by the markets and saw further downside as the day progressed. The Philadelphia Oil Service Index plummeted by 4.3 percent to its lowest closing level in well over nine years.
Weatherford (WFT) led the oil service sector lower after reporting a narrower than expected third quarter loss but revenues that came in below estimates.
The sell-off by oil service stocks reflected weakness throughout the energy sector, as the price of crude oil fell sharply in electronic trading after sliding $0.55 to $67.04 a barrel.
Significant weakness also emerged among retail stocks, as reflected by the 1.9 percent slump by the Dow Jones Retail Index. With the drop, the index fell to a nearly five-month closing low.
Computer hardware, biotechnology, and networking stocks also came under pressure over the course of the session, while interest rate-sensitive utilities, banking, and commercial real estate stocks ended the day on the upside.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan'sNikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index rose by 0.4 percent, the German DAX Index and the U.K.'sFTSE 100 Index jumped by 1.2 percent and 1.3 percent, respectively.
In the bond market, treasuries climbed well off their worst levels of the session but still closed slightly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 3.087 percent.
Further news regarding another round of tariffs on Chinese imports may impact trading on Tuesday along with a report on consumer confidence in the month of October.
On the earnings front, Coca-Cola (KO), General Electric ( GE ), MasterCard (MA), and Pfizer (PFE) are among the companies releasing their quarterly results before the start of trading on Tuesday.
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