U.S. stock indexes were down on Thursday, but off their session lows on what some traders said was due to technical buying amid worries of the outcome of U.S.-China trade talks, rising interest rates and disappointing earnings reports.
A sharp drop out of the open had pushed the benchmark S&P 500 below its 200-day moving average, a key technical indicator of longer-term momentum, for the first time since April 6.
The Dow Jones Industrial Average also dipped below its 200-day mark before both the indexes staged a fight back to reclaim those levels in early afternoon trading.
"I think it was technical. The market`s trying to stabilize and trying to get back on the other side," said Ken Polcari, Director of the NYSE floor division at O`Neil Securities in New York.
While it is considered highly unlikely that the U.S. delegation in Beijing will strike a breakthrough deal to fundamentally change China`s policies, a package of short-term Chinese measures could delay a U.S. decision to impose tariffs on about $50 billion worth of Chinese exports.
The Federal Reserve on Wednesday reaffirmed its outlook for more rate hikes and expressed confidence that a recent rise in inflation near to its target would be sustained.
"It`s definitely rate hikes and tariffs, and the sense that earnings have peaked," said Paul Brigandi, head of trading at Direxion Funds in New York.
"There is a lot of negative sentiment out there ... (on fears) that this really is the end of the cycle and we could see a slowdown at the same time rates are rising."
At 13:22 p.m. ET, the Dow was down 24.97 points, or 0.10 percent, at 23,900.01, above its 200-day average of 23,750.83.
The S&P was down 7.28 points, or 0.28 percent, at 2,628.39, slightly above its 200-day average of 2,615.03.
The Nasdaq Composite was down 11.73 points, or 0.17 percent, at 7,089.17.
Bank stocks dropped, tracking a pullback in U.S. Treasury yields after the ISM non-manufacturing data for April came in below estimates.
Among stocks, Tesla fell 6.3 percent after Chief Executive Officer Elon Musk cut off analysts asking about the company`s profit potential, despite promises that production of the troubled Model 3 electric car was on track.
Declining issues outnumbered advancers for a 1.45-to-1 ratio on the NYSE and for a 1.83-to-1 ratio on the Nasdaq.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)