September 10, 2019 / 6:34 PM / 13 days ago

US STOCKS-Wall Street dips as weak China data fuels slowdown fears

* China producer prices see biggest drop in 3 yrs

* Tech stocks weigh on S&P 500, Nasdaq

* Ford falls as Moody’s downgrades bonds to junk

* China to buy U.S. agricultural goods ahead of trade talks -SCMP

* Indexes off: Dow 0.13%, S&P 0.37%, Nasdaq 0.49% (Updates to late afternoon, changes dateline, byline)

By Stephen Culp

NEW YORK, Sept 10 (Reuters) - Technology stocks led the Wall Street into the red on Tuesday as recessionary fears, fueled by declining producer prices from China, dampened investor risk appetite.

A gain in industrials cushioned the blue-chip Dow’s slide, and the tech-heavy Nasdaq was on track for its third straight decline.

“It looks like a move from growth to value but it’s too early to say if it’s a shift or a trade,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.”

China producer prices, or the prices factories get for the goods they make, fell last month at their sharpest pace in three years as the country grapples with its bruising trade war with the United States.

“The weakness coming out of China reflects a slowing economy as a result of trade negotiations,” Hellwig added.

Hellwig believes, however, that weakness could grease the wheels in Sino-U.S. trade negotiations.

“The consensus is that time is on the side of China, but in the short term, as they see their economy slow and as supply chains shift, that puts pressure on them to get a deal done,” said Hellwig.

Indeed, China is expected to buy more agricultural products to position itself for a better trade deal, according to a report from the South China Morning Post.

The underwhelming data from China weighed on tariff-sensitive technology stocks, which were down 1.1%

Amid signs of a global economic slowdown, market participants largely expect the U.S. Federal Reserve and the European Central Bank to cut interest rates over the next two weeks, and Germany’s finance minister suggested the nation was prepared for a big stimulus package if its economy tips into recession.

The news from Germany sent U.S. Treasury yields higher, tracking German bonds.

The Dow Jones Industrial Average fell 36.11 points, or 0.13%, to 26,799.4, the S&P 500 lost 11.06 points, or 0.37%, to 2,967.37 and the Nasdaq Composite dropped 39.53 points, or 0.49%, to 8,047.90.

Of the 11 major sectors in the S&P 500, seven were lower, with real estate and tech seeing the biggest percentage drops.

Energy was the biggest percentage gainer, boosted by what appears to be the fifth consecutive daily increase in oil prices.

Wendy’s Co dropped 9.6% after the fast food chain projected a drop in full-year 2019 adjusted earnings.

Wendy’s rival McDonald’s Inc announced it would buy Silicon Valley start-up Apprente. Its stock dipped 3.4%

Ford Motor Co’s bond rating was downgraded to junk by Moody’s, sending the automaker’s shares down 2.6%.

Mallinckrodt Plc, having been plagued by opioid litigation uncertainties, announced it would sell BioVectra Inc to private equity firm H.I.G. Capital for up to $250 million, sending the drugmaker’s shares surging 75.7% higher.

Francesca’s Holdings Corp shot up 74.8% after the specialty retailer posted better-than-expected second quarter results.

Advancing issues outnumbered declining ones on the NYSE by a 1.42-to-1 ratio; on the Nasdaq, a 1.66-to-1 ratio favored advancers.

The S&P 500 posted 13 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 35 new highs and 36 new lows. (Reporting by Stephen Culp; Editing by Steve Orlofsky)

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