Smaller companies and industrials fade

NEWYORK » Stocks faded Tuesday afternoon and finished the day mostly lower as industrial companies and retailers fell. Smaller and more U. S.- focused companies slumped after setting records the last few days.

Large industrial companies like Boeing, 3M and Caterpillar slipped, and retailers including Kohl’s, AutoZone and Advance Auto Parts fell after releasing their quarterly results. Energy companies fell as crude oil gave up an early gain. Smaller companies had theirworst day of the month as a winning streak that brought them to all- time highs came to an end.

For most of the day stocks were on track for small gains. Automakers rose after China said it will reduce duties on imported cars in July, a sign the U. S. and China could resolve some of their differences on trade. Banks climbed as Congress prepared to loosen some of the rules that have governed the industry since the 2008 financial crisis.

Stocks rose Monday as investors grewmore hopeful that the trade dispute between the U. S. and China will be resolved without major effects on the global economy. But Marina Severinovsky, an investment strategist at Schroders, said the two countries appear to be looking for easy wins without addressing larger and more difficult issues, like China’s technology policies and its handling of intellectual property.

That might pacify the market for now because the global economy is doing well, but she thinks tensions will eventually flare up again.

“The more competitive the Chinese become in higher- end industries ... the more this is really going to become an issue,” she said. “There will bemore industries and companies clamoring for protection.”

The S& P 500 index slid 8.57 points, or 0.3percent, to2,724.44. The Dow Jones industrial average lost 178.88 points, or 0.7 percent, to 24,834.41. The Nasdaq composite fell 15.58points, or 0.2 percent, to 7,378.46. The Russell 2000 index of smaller company stocks gave up 12.20 points, or 0.7 percent, to 1,625.24 after it closed at record highs the last four days.

J. C. Penney was one of the worst performers among both small companies and retailers. It fell 6 percent to $ 2.35 after it said Chairman and CEO Marvin Ellison will leave to become CEO of Lowe’s.