(Reuters) - U.S. stocks struggled for direction on Tuesday after rallying strongly last week, as investors focused on the latest round of trade talks between the United States and China.
Hopes that the two countries will hammer out a deal to end their protracted trade war had helped the S&P 500 and the Nasdaq log their best week in a month on Friday.
The talks in Washington follow a round of negotiations that ended in Beijing last week without a deal but which officials said had generated progress on contentious issues between the world’s two largest economies.
“We had a fairly good rally on Friday and there is a hint of profit-taking before the resumption of the trade talks,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Investors are cautious but the hope factor is still alive in the markets, which is what stocks rallied on last week.”
The tariff-vulnerable industrials sector dropped 0.29 percent, with bellwether Boeing Co down 0.4 percent.
The consumer staples sector rose 0.40 percent, the most among the 11 major S&P sectors, helped by a 3.8 percent rise in shares of Walmart Inc.
The big-box retailer reported an estimate-beating jump in holiday quarter comparable sales, helped by higher consumer spending and more e-commerce purchases.
Shares of fellow retailer Target Corp gained 0.7 percent, while Costco Wholesale Corp rose 1.1 percent.
Walmart’s results follow a shockingly weak Commerce Department report last week that showed U.S. retail sales recorded their biggest drop in more than nine years for December, stoking fears of an economic slowdown.
At 9:49 a.m. ET the Dow
