US STOCKS-S&P 500, Dow slip on trade worries, but end off of lows


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* Nasdaq ends higher on volatile day, as tech gains

* Huawei CFO arrest reignites fears of U.S.-China tradetensions

* Energy shares drop as oil stumbles after OPEC meeting

* Financials drop along with U.S. bond yields

* Dow down 0.32 pct, S&P 500 down 0.15 pct, Nasdaq up 0.42pct (Updates with close of U.S. markets)

By Lewis Krauskopf

Dec 6 (Reuters) - The S&P 500 and Dow industrials endedslightly negative but well above their session lows in volatiletrading on Thursday as the arrest of a Chinese technologyexecutive fanned fears of U.S-China tensions over trade, whilesome beaten-up big technology and internet shares posted gains.

Following a rare midweek U.S. trading holiday, stockstumbled at the outset of the trading, with the benchmark S&P 500dropping as much as 2.9 percent. But from midday stocks beganparing their losses and the tech-heavy Nasdaq ended in positiveterritory.

"The market had gotten way oversold," said Gary Bradshaw,senior vice president and portfolio manager at Hodges CapitalManagement in Dallas. "Investors looked up and saw they couldbuy good companies at much cheaper valuations than they could acouple of months ago."

The initial selling followed news that the chief financialofficer of telecom equipment maker Huawei Technologies had beenarrested in Canada and faced extradition to the United States. urn:newsml:reuters.com:*:nL1N1YA1YR

The arrest came as investor enthusiasm had already fadedfollowing a truce reached over the weekend in talks between theUnited States and China, which had prompted some hope aboutresolving differences over trade that have clouded the stockmarket's outlook this year.

"You have got the news overnight of the arrest of the CFO ofHuawei that I think is throwing a real monkey wrench into thepositive optimism that surrounded the weekend meeting," saidKatie Nixon, chief investment officer for the wealth managementdivision of Northern Trust in Chicago.

Stocks seemed to gain further support from a report in theWall Street Journal that Federal Reserve officials areconsidering whether to signal a new wait-and-see mentality aftera likely interest-rate increase at their meeting in December. urn:newsml:reuters.com:*:nL4N1YB5N6

The Dow Jones Industrial Average .DJI fell 79.4 points, or0.32 percent, to 24,947.67, the S&P 500 .SPX lost 4.11 points,or 0.15 percent, to 2,695.95 and the Nasdaq Composite .IXIC added 29.83 points, or 0.42 percent, to 7,188.26.

Aside from trade, concerns over bond yields and interestrates have pressured the stock market in recent days.

U.S. Treasury yields fell on Thursday, with 10-year yieldshitting three-month lows, as traders scaled back expectations onthe number of rate hikes the Fed would implement amid weakeningeconomic data and market volatility. urn:newsml:reuters.com:*:nL1N1YB286

Financial shares .SPSY , which are sensitive to bond yieldswings, fell 1.4 percent.

The energy sector .SPNY slumped 1.8 percent and was theworst performing group, as oil fell after OPEC and alliedexporting countries ended a meeting without announcing adecision to cut crude output. urn:newsml:reuters.com:*:nL4N1YB17O

Losses for the S&P 500 were mitigated by gains for AmazonAMZN.O , NetflixNFLX.O and some of the other technology andinternet stocks that have been hit particularly hard during themarket's pullback in recent months.

The major indexes fell more than 3 percent each on Tuesday.Markets were closed on Wednesday for a day of mourning forformer President George H.W. Bush, who died on Friday. urn:newsml:reuters.com:*:nL1N1Y920X

About 10.5 billion shares changed hands in U.S. exchanges,well above the 7.9 billion daily average over the last 20sessions.

Declining issues outnumbered advancing ones on the NYSE by a1.75-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored decliners.

The S&P 500 posted 14 new 52-week highs and 70 new lows; theNasdaq Composite recorded nine new highs and 376 new lows. (Additional reporting by April Joyner in New York; Editing bySriraj Kalluvila, Dan Grebler and Jonathan Oatis) ((lewis.krauskopf@thomsonreuters.com; 646-223-6082; ReutersMessaging: lewis.krauskopf.thomsonreuters.com@reuters.net,Twitter: @LKrauskopf))




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