U.S. Stocks Turn Lower as Real-Estate Shares Slide

By Akane Otani and Mike Bird Features Dow Jones Newswires

U.S. stock indexes edged lower Tuesday, weighed by declines in the shares of real-estate companies.

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The Dow Jones Industrial Average fell 45 points, or 0.2%, to 20936. The S&P 500 lost 0.3%, and the Nasdaq Composite slid 0.2%.

Major stock indexes have largely risen in recent weeks as corporate earnings have shown strength among firms in the U.S. and beyond. Investors' expectations for global profits are at a three-year high, Bank of America Merrill Lynch said Tuesday, with more than half of fund managers expecting results to improve over the next 12 months.

Still, some analysts say political uncertainty in the U.S. could weigh on stocks, especially if they appear to reduce the chances of tax cuts, which many hope will boost earnings. Bets on lower tax rates under the Trump administration had helped U.S. stocks rally after Election Day.

"In terms of potential implications for the markets, finding support in Congress for fiscal measures may prove even more difficult for President Donald Trump if the latest reports undermine his relationship with the Republicans," said Piotr Matys, foreign-exchange strategist at Rabobank, referring to reports that the president shared sensitive intelligence obtained from a close U.S. ally with Russia's foreign minister and ambassador.

Real-estate shares slid 0.6% in the S&P 500, among the worst-performing sectors in the broad index Tuesday, after data showed U.S. new-home construction declined in April for the third time in four months. Shares of Regency Centers, a real-estate investment trust, lost 2.7%.

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Shares of companies that own and manage shopping centers also slid, with Simon Property Group falling 1.4% and Kimco Realty losing 2.9%. Earlier, TJX reported first-quarter sales that missed analysts' expectations, becoming the latest major retailer to post downbeat sales results for the latest quarter.

As stocks fell, government bonds ticked higher, with the yield on the 10-year U.S. Treasury note falling to 2.312% from 2.338% Monday. Yields fall as bond prices rise.

Oil prices climbed, with U.S. crude rising 0.2% to $48.92 a barrel, on track for its fifth consecutive session of gains. Crude for June delivery settled Monday at its highest level since Apri l after Russian and Saudi Arabian energy ministers said they agreed to back a nine-month extension of production cuts aimed at bringing down global inventories.

Elsewhere, European stocks wavered, with the Stoxx Europe 600 down less than 0.1%.

Japan's Nikkei Stock Average edged up 0.3% and the Shanghai Composite rose 0.7%, posting its fourth consecutive session of gains.

Write to Akane Otani at akane.otani@wsj.com and Mike Bird at Mike.Bird@wsj.com

(END) Dow Jones Newswires

May 16, 2017 11:25 ET (15:25 GMT)