Wall Street dips as gloomy forecasts weigh on sentiment

© Reuters. Traders work on the floor of the NYSE in New York

By Medha Singh

(Reuters) – The three main U.S. indexes retreated slightly on Wednesday from two-month highs, as videogame makers reported disappointing revenue forecasts, while investors waited for more clarity on U.S.-China trade developments.

Electronic Arts Inc (NASDAQ:) and Take-Two (NASDAQ:) Interactive Software Inc tumbled more than 13 percent, leading the communication services sector down 1.43 percent, the most among the nine major sectors in the red.

The technology sector, up 0.20 percent, was boosted by chipmakers with the Philadelphia chip index rising 2.87 percent.

Apple (NASDAQ:) supplier Skyworks (NASDAQ:) Solutions Inc jumped 11.64 percent after announcing a $2 billion buyback, while Microchip Technology (NASDAQ:) rose 8.06 percent after the company suggested a recent chip industry downturn was nearing a bottom.

The possibility of the extending its winning streak for the sixth straight day was under pressure.

“It’s been a mixed bag of earnings reports and concerns still loom, it’s uncertainty that causes these pauses in the markets,” said Brian Yacktman, chief investment officer at YCG Enhanced Fund in Austin, Texas.

“The uncertainty of the ongoing trade negotiations with China has been looming over the markets and once there is certainty on the outcome, there is no question that markets will breathe a sigh of relief.”

U.S. Treasury Secretary Steven Mnuchin said trade talks with China last week were “very productive” and confirmed that he and other officials will travel to Beijing for the next round of meetings, as the world’s biggest economies aim to clinch a deal to avert a March 2 increase in U.S. tariffs on Chinese goods.

A strong run in stocks recently, boosted by U.S.-China trade optimism and a dovish stance from the Federal Reserve has put the benchmark index about 7 percent

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