UKX FTSE 100 Index

By Will Horner and Joanne Chiu 

U.S. stocks swung between small gains and losses Monday as officials from Washington and Beijing kicked off their latest round of negotiations over trade policy.

The Dow Jones Industrial Average fell 56 points, or 0.2%, to 23379. The S&P 500 added 0.1% and the Nasdaq Composite rose 0.4%.

Investors are beginning the week with their focus on the U.S. and China's trade negotiations, something many hope will help bring the two countries closer to a resolution. Signs of slowing economic growth around the world have added to many investors' sense of anxiety in recent weeks, contributing to wild swings in the stock market.

The fact that policy makers in the U.S. and China have agreed to meet is a positive sign, said Felix Lam, a portfolio manager at BNP Paribas Asset Management. Still, the key question is whether the two countries will reach a trade deal, Mr. Lam said.

"Any positive outcome from the trade talks would have a more long-lasting impact on the earnings trajectory of corporations in Asia," he said, adding that delays, on the other hand, could hit corporate profits.

Deal news drove swings across the stock market Monday.

Shares of Eli Lilly fell 1.2% after the company said it was buying Loxo Oncology, adding to its oncology-treatment portfolio. Loxo shares surged 66%.

Meanwhile, Dollar Tree shares jumped 4% after activist investor Starboard Value took a stake in the company. Starboard is pushing the retailer to sell its Family Dollar business.

Elsewhere, the Stoxx Europe 600 fell 0.3%. The U.K.'s FTSE 100 lost 0.5% as investors there awaited a parliamentary debate, set to begin this week, on the nation's fraught departure from the European Union.

British Prime Minister Theresa May is widely expected to lose a vote later this month on her planned Brexit deal. Lawmakers will debate the deal this week with some potentially crucial amendments expected, said analysts at UniCredit. They added, however, that they expect the deal to pass on a second or third attempt at a vote.

"If, however, there remains an impasse in the U.K. parliament at the 11th hour, then a [second Brexit] referendum...could become the only way out of the mire," analysts said.

Stocks across Asia finished higher, with Japan's Nikkei Stock Average jumping 2.4% as the yen weakened. A weaker yen tends to help the country's exporters, since it makes their goods cheaper to foreign buyers.

South Korea's Kospi climbed 1.4%, while the Shanghai Composite advanced 0.7%.

The strong climbs in Asia followed a stock surge on Wall Street Friday, after better-than-expected U.S. nonfarm payroll figures suggested a healthy labor market and eased investors' concerns about the potential for a U.S. economic slowdown. Comments later that day from Federal Reserve Chairman Jerome Powell -- who said economic data suggested good momentum heading into the new year -- added a further boost to see the Dow industrials close nearly 750 points higher, or 3.3%.

The positive employment figures were "a piece of good news in what has been a pretty grim set of economic data for some time now," said Peter Dixon, economist at Commerzbank, noting that investors' concerns around global growth and the U.S.-China trade dispute remained.

"Today is probably the first full trading day of the year and I suspect that this is going to set the tone for the next few sessions," Mr. Dixon said. "Many of the risks that were there last year still remain on the table."

Joanne Chiu contributed to this article

Write to Joanne Chiu at joanne.chiu@wsj.com

(END) Dow Jones Newswires

January 07, 2019 10:23 ET (15:23 GMT)

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