By Karen Langley and Anna Isaac 

The S&P 500 and Dow Jones Industrial Average declined for the third consecutive session Thursday as investors assessed conflicting signs on trade.

The Dow Jones Industrial Average edged down 54.80 points, or 0.2%, to 27766.29. The S&P 500 slipped 4.92 points, or 0.2%, to 3103.54, and the Nasdaq Composite slid 20.52 points, or 0.2%, to 8506.21. All three indexes remain within 1% of their records set earlier in the week.

Investors continued to monitor the drumbeat of headlines on attempts to resolve trade tensions between the U.S. and China.

China's chief trade negotiator invited his American counterparts for a new round of face-to-face talks, according to people briefed on the matter, The Wall Street Journal reported. Chinese officials hope the negotiations can take place before the Thanksgiving holiday, but the U.S. side hasn't committed to a date.

That report came less than a day after President Trump criticized China's efforts to reach a trade agreement, escalating concerns that the world's two biggest economies won't reach a deal this year.

"The market really doesn't know what leg to stand on at this stage," said Ole Hansen, head of commodity strategy at Saxo Bank. "We have this roller coaster, or hamster wheel, on trade."

All three major U.S. stock indexes have notched a string of all-time highs in recent weeks as investors have grown more confident about the health of the U.S. economy. But shares of big U.S. companies have trended downward in the past few days.

"Even though we've been reaching new heights, they were smaller gains on light volume," said Mariann Montagne, portfolio manager at Gradient Investments. "It doesn't surprise us we would have a little consolidation."

Overseas, the pan-continental Stoxx Europe 600 index retreated 0.4%, led by losses in sectors most exposed to the global economic impact of worsening trade tensions.

Adding to strains between the two nations, Beijing on Wednesday summoned the highest-ranking U.S. diplomat in the capital to object to Washington's support for Hong Kong protesters after the House of Representatives passed legislation Wednesday requiring the U.S. to re-examine its relationship with Hong Kong. That put formal American support for the pro-democracy protests in the hands of Mr. Trump.

While most S&P 500 sectors posted losses, shares of energy companies gained 1.6%, as U.S. crude rose 2.8%.

Company-specific news drove swings in individual stocks. Shares of Charles Schwab jumped $3.28, or 7.3%, to $48.03 on reports that the brokerage is in talks to buy TD Ameritrade Holding. TD Ameritrade surged $7, or 17%, to $48.38, recording its largest percent increase since Sept. 19, 2008. Rival E*Trade Financial dropped $4.28, or 9.3%, to $41.58.

Shares of Tiffany rose $3.17, or 2.6%, to $126.50, following a Reuters report that LVMH Moët Hennessy Louis Vuitton SE has gained access to the jewelry retailer's books after it improved its takeover offer to nearly $16 billion.

Josh Wein, portfolio manager at Hennessy Funds, said the recent spate of discussion about potential mergers and acquisitions could indicate some business leaders see growth as increasingly difficult to achieve.

"It seems like the low-hanging, organic growth we've seen throughout the cycle, corporate America or CEOs are thinking that might be coming to an end," he said.

Investors have been paying close attention to signs of the health of the U.S. economy, and a recent drive into shares of economically sensitive companies, like banks and manufacturers, has suggested optimism about the economic outlook.

New data Thursday showed the number of Americans applying for first-time unemployment benefits held steady at a near five-month high last week, above the level expected by economists surveyed by The Wall Street Journal. The recent rise in jobless claims could be an early indication of a cooling labor market, or it could reflect seasonal volatility around the holidays.

The yield on the benchmark 10-year U.S. Treasury was 1.771%, up from 1.737% Wednesday. Bond yields rise as prices fall.

--Caitlin Ostroff and Joanne Chiu contributed to this article.

Write to Karen Langley at karen.langley@wsj.com and Anna Isaac at anna.isaac@wsj.com

 

(END) Dow Jones Newswires

November 21, 2019 17:05 ET (22:05 GMT)

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