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Escalating Sino-U.S. tensions strain S&P 500, Dow

Credit: REUTERS/BRENDAN MCDERMID

The S&P 500 and Dow were subdued on Tuesday as Sino-U.S. tensions escalated following President Donald Trump's moves to force a sale of TikTok's U.S. operations, with investors also disappointed by quarterly results from Ralph Lauren and AIG.

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Trump says government should get a portion of TikTok sale price

China Daily says Beijing won't accept "theft"

Congress to resume talks on coronavirus relief bill

AIG, Spirit Aero, Ralph Lauren slide as results disappoint

Indexes subdued: Dow down 0.07%, S&P up 0.01%, Nasdaq up 0.24%

Updates to open

By Sagarika Jaisinghani and Medha Singh

Aug 4 (Reuters) - The S&P 500 and Dow were subdued on Tuesday as Sino-U.S. tensions escalated following President Donald Trump's moves to force a sale of TikTok's U.S. operations, with investors also disappointed by quarterly results from Ralph Lauren and AIG.

Ralph Lauren Corp RL.N slumped 6.8% to its lowest since mid-May after quarterly revenue plunged by nearly $1 billion due to coronavirus-led store closures and a slowdown in global demand for luxury goods.

American International Group Inc AIG.N also led declines on the S&P 500 with a 5.2% drop as its quarterly adjusted profit slumped.

Still, about seven of the 11 major S&P 500 sectors were trading higher, with utilities .SPLRCU, energy .SPNY and real estate .SPLRCR leading gains. A 1.4% rise in Amazon.com Inc AMZN.O boosted both the S&P consumer discretionary index .SPLRCI and the tech-heavy Nasdaq.

"The markets have been relatively narrow and benchmarks have been fortunate that they had so much weightage in the big tech companies," said Stephen Lee, portfolio manager at Logan Capital Management in Newtown Square, Pennsylvania.

"Now we just have to see how we do outside of the technology-focused companies."

A stimulus-led rebound and a rally in tech-related stocks including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon has brought the S&P 500 to within 3% of its all-time high, and all eyes now are on a fifth major coronavirus-aid bill with Congress set to resume talks on Tuesday.

Meanwhile, with Microsoft Corp MSFT.O looking to buy short-video app TikTok's U.S. operations, Trump said on Monday the U.S. government should get a "substantial portion" of any deal price.

On Tuesday, state-backed newspaper China Daily said the country will not accept the "theft" of the technology company.

Microsoft's shares fell 1.4% in early trading.

At 10:06 a.m. ET, the Dow Jones Industrial Average .DJI was down 19.32 points, or 0.07%, at 26,645.08, while the S&P 500 .SPX was up just 0.28 points, or 0.01%, at 3,294.89.

The Nasdaq Composite .IXIC was up 25.81 points, or 0.24%, at 10,928.61.

Take-Two Interactive Software Inc TTWO.O rose 3.5% as it raised its annual adjusted sales forecast on demand for its videogame franchises "Grand Theft Auto" and "NBA 2K".

Rival Activision Blizzard Inc ATVI.O inched lower ahead of its results due after the closing bell.

Spirit AeroSystems SPR.N dropped 5.3% on posting a bigger-than-expected quarterly loss.

About 83% of the 322 companies in the S&P 500 that have reported quarterly results so far have beaten estimates for earnings, according to IBES Refinitiv data.

Walt Disney Co DIS.N, Fox Corp FOXA.O and Wynn Resorts Ltd WYNN.O are also expected to report quarterly results later in the day.

Advancing issues nearly matched decliners both on the NYSE and the Nasdaq.

The S&P index recorded 11 new 52-week highs and no new low, while the Nasdaq recorded 76 new highs and four new lows.

(Reporting by Sagarika Jaisinghani and Medha Singh in Bengaluru; editing by Uttaresh.V)

((Sagarika.Jaisinghani@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2256;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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