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The benchmark S&P 500 fell on Wednesday for the third day in a row as investors remained cautious about the latest developments on U.S.-China trade talks even after hopeful comments from the White House regarding an eventual agreement.

A late slide in shares of Intel Corp contributed to losses in the last half-hour of trading. Shares of the chipmaker fell 2.5 per cent after the company’s outlook during its investor day presentation disappointed.

Wall Street had edged higher for much of the session after White House spokeswoman Sarah Sanders said that the United States had received an indication from Beijing that China wants to make a trade deal. China’s lead negotiator, Vice Premier Liu He, is due to visit Washington on Thursday and Friday.

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Still, the U.S. government said in its official journal that it would raise tariffs on $200 billion worth of Chinese goods to 25 per cent on Friday. China’s commerce ministry later said it would have to take retaliatory measures if U.S. tariffs were raised.

The mixed tone of trade developments made it difficult for U.S. stocks to sustain their rally, investors said.

“The last 30 minutes lets you know that people are still leaning bearish mid-week,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

Even as the S&P 500 rose in the afternoon, defensive sectors such as real estate and healthcare were among the index’s top gainers. The trade-sensitive industrial sector ended little changed, while Intel’s decline dragged down technology shares.

“It’s consistent with people being unsure about what’s actually going to come out of Washington this week,” said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

The Dow Jones Industrial Average rose 2.24 points, or 0.01 per cent, to 25,967.33, the S&P 500 lost 4.63 points, or 0.16 per cent, to 2,879.42 and the Nasdaq Composite dropped 20.44 points, or 0.26 per cent, to 7,943.32.

The benchmark S&P 500 is now 2.5 per cent below its record high of 2,954.13 hit last week.

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Canada’s main stock index rose on Wednesday, after two sessions of declines, as positive earnings and a rebound in energy stocks buoyed sentiment with focus on a crucial round of trade talks between the United States and China.

Lifting the mood was data that showed Canadian housing starts surged nearly 23 per cent in April, compared with the previous month, as groundbreaking increased on multiple unit and single detached urban homes.

The Toronto Stock Exchange’s S&P/TSX composite index was up 39.65 points, or 0.24 per cent, at 16,397.40.

Five of the 11 major S&P sectors were higher, with the energy sector climbing 1.7 per cent.

The largest percentage gainers on the TSX included Element Fleet Management Corp., which jumped 13.8 per cent after reporting a better-than-expected quarterly profit. Shares of Thomson Reuters Corp. rose 3 per cent after reporting a stronger-than-expected quarterly profit, boosted by demand for information it sells to legal professionals, and reaffirmed its forecast for the rest of this year and 2020.

Bond prices fell on the White House announcement, with the benchmark 10-year U.S. Treasury note slipping 10/32 in price to push up its yield to 2.4835 per cent.

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Portuguese, Irish and Spanish yields hit historic lows and Portugal saw firm demand at an auction, but Italian yields rose on concerns over tension within Rome’s ruling coalition.

Portuguese 10-year bond yields fell to a record low of 1.07 perc ent and Spain’s 10-year bond yield fell to a more than two-year low of 0.94 per cent. Irish long-dated bond yields dropped below 0.5 per cent for the first time since December 2017.

The dollar index fell 0.01 per cent, with the euro up 0.01 per cent to $1.1191. The Japanese yen strengthened 0.11 per cent versus the greenback at 110.15 per dollar.

West Texas Intermediate oil futures rose more than 1 per cent, boosted by a surprise drawdown in U.S. crude stockpiles.

U.S. crude inventories fell by 4 million barrels in the week to May 3, the Energy Information Administration said. Analysts had expected an increase of 1.2 million barrels.

Brent crude futures settled up 49 cents at $70.37 a barrel. U.S. WTI crude futures rose 72 cents to settle at $62.12 a barrel.

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U.S. gold futures settled down 0.3 per cent at $1,281.40. Earlier they had touched $1,292.80.

Reuters

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