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Wall St heads lower as trade deal optimism fades

Credit: REUTERS/STAFF

Wall Street was set to fall for the first time in four sessions on Monday on signs there was more hard work to be done before a partial trade deal with China announced by President Donald Trump on Friday could be sealed.

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Mnuchin sees extra tariffs in Dec if deal not signed

China seeking more talks before signing deal - BBG

Apple, chipmakers down slightly premarket

Delta Air Lines falls 1% after Stephens cuts rating

Futures down: Dow 0.29%, S&P 0.29%, Nasdaq 0.31%

Adds comments, details; updates prices

By Sagarika Jaisinghani

Oct 14 (Reuters) - Wall Street was set to fall for the first time in four sessions on Monday on signs there was more hard work to be done before a partial trade deal with China announced by President Donald Trump on Friday could be sealed.

The S&P 500 and Dow Jones indexes ended Friday with their first weekly gain in a month after the U.S. President announced an accord he said would see both sides ease the tit-for-tat measures that have hammered global growth this year.

Trump, however, acknowledged the agreement could still collapse and a handful of media reports and comments from Treasury Secretary Steven Mnuchin left investors feeling less upbeat about what had really been achieved.

Shares of companies with a sizeable exposure to China, including Apple Inc AAPL.O, Nvidia Corp NVDA.O, Advanced Micro Devices Inc AMD.O and Micron Technology Inc MU.O, slipped slightly in premarket trading after soaring on Friday. The iShares Phil Semiconductor ETF SOXX.O was set to open down about 0.5%.

Treasury Secretary Mnuchin said in a CNBC interview that he had "every expectation" that if a U.S.-China trade deal was not in place by Dec. 15, additional tariffs would be imposed, although he said he expected a deal to be agreed by then.

"If the Chinese want to keep talking, I think the Trump administration is willing to have them talk, but on Dec. 15 there will be new tariffs," said John Brady, senior vice president at R.J. O'Brien & Associates in Chicago.

At 8:54 a.m. ET, Dow e-minis 1YMcv1were down 78 points, or 0.29%. S&P 500 e-minis EScv1were down 8.5 points, or 0.29% and Nasdaq 100 e-minis NQcv1were down 24.25 points, or 0.31%.

Investors will now be looking at third-quarter earnings to gauge the impact of the trade conflict and a sluggish domestic economy on corporate America.

The reporting season kicks off on Tuesday, with the biggest U.S. banks expected to report a 1.2% decline in earnings due to falling interest rates, a raft of unsuccessful stock market flotations and macroeconomic tensions.

Bank of America Corp BAC.N, Citigroup Inc C.N, JPMorgan Chase & Co JPM.N were down between 0.3% and 0.5% in premarket trading. The S&P 500 bank index .SPXBK had logged its best day in a month on Friday.

Overall, analysts are forecasting a 3.2% decline in profit for S&P 500 companies for the quarter from a year earlier, based on IBES data from Refinitiv.

Shares of oil majors Exxon Mobil Corp XOM.N and Chevron Corp CVX.N fell between 0.5% and 0.7%, tracking a 2% fall in oil prices. O/R

Fastenal Co FAST.O was down 2.5% after two brokerages downgraded the stock. The company had logged its best day in three decades on Friday after reporting strong results.

Delta Air Lines Inc DAL.N fell 1.1% after Stephens cut its rating on the stock to "equal-weight" from "overweight", citing rising costs. It also cut its price target to $57 from $75.

Shares of U.S. construction and engineering company AECOM ACM.N were an outperformer, rising 7.7% after it agreed to sell its management services unit to private equity firms Lindsay Goldberg and American Securities for about $2.4 billion.

(Additional reporting by Arjun Panchadar and Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)

((Sagarika.Jaisinghani@thomsonreuters.com; within U.S. +1 646 223 8780, outside U.S. +91 80 6749 0613))

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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