© Reuters. Traders work on the floor of the NYSE in New York
By April Joyner
NEW YORK (Reuters) – U.S. stocks edged lower on Wednesday as videogame makers reported disappointing revenue forecasts and investors awaited developments on U.S.-China trade relations.
The benchmark and the Nasdaq were weighed by declines in shares of Electronic Arts Inc (NASDAQ:), which tumbled 12.3 percent after the videogame publisher forecasted full-year revenue below Wall Street estimates. The sharp drop pulled down shares of rival videogame publisher Activision Blizzard Inc (NASDAQ:), which fell 10.9 percent.
Shares of industry peer Take-Two (NASDAQ:) Interactive Software Inc also dropped sharply, 14.5 percent, after the company’s similarly underwhelming forecast.
The slump in videogame stocks contributed to a 1.7 percent decline in the S&P 500 communication services sector, the largest drop among the S&P’s major sectors.
Despite the fall, Wall Street’s indexes remained near two-month highs. A 7.5 percent gain in the S&P 500 would put the index above its record closing September high.
“The market is feeling a little exhausted after we’ve had a nice run in January and early February,” said Nathan Thooft, global head of asset allocation at Manulife Asset Management in Boston.
“It’s hard to decipher macro dynamics. The Fed is dovish, but the market has fully priced that in. Then you have the trade war conversations. We get little bits of news every day.”
The fell 28.83 points, or 0.11 percent, to 25,382.69, the S&P 500 lost 8.68 points, or 0.32 percent, to 2,729.02 and the dropped 34.06 points, or 0.46 percent, to 7,368.02.
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