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Markets closed mostly higher on Monday as fresh rounds of trade talks between the United States and China began. While the S&P 500 and Nasdaq ended in positive territory, the Dow declined to finish in the red. Meanwhile, reemergence of shutdown fears weighed on the broader markets. Worryingly enough, the Democrats and Republicans still remain divided over border-wall and immigration policies

The Dow Jones Industrial Average (DJI) decreased 0.2%, to close at 25,053.11. The S&P 500 increased almost 0.1% to close at 2,709.80. The tech-laden Nasdaq Composite Index closed at 7,307.90, gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.3% to close at 15.20. Advancers outnumbered decliners on the NYSE by a 1.78-to-1 ratio. On Nasdaq, a 1.99-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow shed 53.22 points to end the session in the red. Shares of UnitedHealth Group UNH , Pfizer PFE and Merck & Co., MRK declined 1.8%, 1.3% and 1%, respectively and weighed on the 30-stock index.

Meanwhile, the S&P 500 added almost 2 points to end the session in the green. Of the 11 major segments of the S&P 500, seven ended in the green with industrials leading the gainers. The Industrial Select Sector SPDR ETF (XLI) gained 0.5%. Commencement of a fresh round of trade negotiations between the United States and China boosted trade sensitive stocks such as Boeing BA and Caterpillar CAT , shares of which gained 1% each.

Nasdaq, on the other hand, rose 9.7 points to end in positive territory. Gains for the tech-heavy index were buoyed by an uptick in the shares of Amazon AMZN , which gained 0.2%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

U.S.- China Trade Talks Keep Investors on Tenterhooks

Representatives from two of the world's largest economies began a fresh round of trade negotiations on Feb 11 in Beijing. While such discussions have been termed as only working-level, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are expected to arrive on Thursday for the next level of talks.

Media reports have surfaced that tariffs on Chinese goods are likely to remain at 10% beyond the Mar 2, 2019 deadline. However, the inability to reach a deal will hurt market sentiment. Moreover, trade sensitive stocks would also bear the brunt of such a failiure.

Shutdown Fears Looming Large

Investors grappled with fears of a second government shutdown as Democrats and Republicans remain at loggerheads over border-wall funding. The deadline for the deal is Feb 15. Members of the GOP had demanded $5.7 billion for constructing the border wall which the Democrats have refused to agree to.

Further, in a spate of interviews with NBC, Acting White House chief of staff Mick Mulvaney has stated that "you absolutely cannot" deny the possibility of a second shutdown if a deal is not reached before the current deadline ends. Further, President Donald Trump had tweeted over the weekend that "I actually believe they (Democrats) want a shutdown."

Moreover, the two parties also debated on Sunday about whether to cap the number of migrants that Customs and Immigration Enforcement, or ICE can detain. Such developments added to shutdown fears.

Stocks That Made Headlines

Norfolk Southern Up 3% on Bullish Long-Term Financial Goals

Norfolk Southern Corporation NSC has provided a bullish outlook, both for 2019 and the long-term at the Investor and Financial Analyst Conference held yesterday. ( Read More )

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