Wall Street stocks pull back; Sterling rises again

Wall Street stocks retreated Wednesday as lingering questions over Brexit talks and the state of US-China trade relation offset another batch of good earnings.

Equity analysts pointed to doubts about whether revived efforts between British leader Boris Johnson and European Union officials will yield a Brexit agreement that can win support in Britain.

The dustup comes only days after the United States and China reached a preliminary partial trade agreement that suspended new tariff increases that had been planned for this week.

But investors view that agreement as precarious given that Washington has signaled it could still enact new tariffs in December if additional steps are not taken.

Stocks are not "down very much but it suggests to me that some of the euphoria of the last week or so is fading," said FTN Financial's Chris Low, who also cited a weak September US retail sales report as a factor. "That's probably partly because, in addition to bad retail sales, there are growing doubts about the China trade deal and a Brexit compromise."

Stock markets elsewhere were mixed, while the pound rose following a topsy-turvy session on shifting Brexit sentiment. Negotiators in Brussels worked frantically ahead of a Thursday summit where EU leaders will decide whether to give the go-ahead to officials to draw up a final withdrawal treaty with Britain.

"There have been many twists and turns in the Brexit story but the latest developments suggest that negotiations are heading in the right direction," said analyst David Madden at CMC Markets.

But uncertainty also clouded the reception among British Prime Boris Minister Johnson's skeptical Northern Irish allies, the Democratic Unionist Party.

He met with them in London for the third time in three days to try to persuade them to support his compromise deal.

"Sterling's whipsaw action is likely to persist until markets gain some semblance of clarity over Brexit," said Joe

Manimbo, senior market analyst at Western Union Business Solutions.

"A deal would come at the surprise to many but wield the potential to thrust sterling significantly higher. Should the talks fail to deliver a deal, sterling would be a risk of a renewed and potentially sharp slide." Among individual companies, Bank of America climbed 1.5 percent after reporting better-than-expected results on higher profits in consumer banking and most other divisions.

General Motors won 1.1 percent after it reached a preliminary deal with leaders of the United Auto Workers to end a month- long strike. However, the agreement must still be ratified by a majority of the union's members.