US STOCKS-Wall Street mixed with focus on US-China trade talks

By Kanchana Chakravarty and Sukriti Gupta

June 9 (Reuters) - Wall Street's main indexes were mixed on Monday as investors watched a fresh round of U.S.-China negotiations aimed at mending a trade rift that has rattled financial markets for much of the year.

Top officials from both countries have kicked off discussions at London's Lancaster House, looking to get back on track with a preliminary trade agreement struck last month that had briefly cooled tensions between the world's largest economies.

"I think it'll be a watered down deal, but it'll be a deal, and that would alleviate some of the fear factors over tariffs," said Peter Cardillo, chief market economist at Spartan Capital Securities.

Hopes of more trade deals between the U.S. and its major trading partners, along with upbeat earnings and tame inflation data, helped U.S. equities rally in May, with the S&P 500 and the tech-heavy Nasdaq .IXIC notching their best monthly gains since November 2023.

The S&P 500 remains a little more than 2% below all-time highs touched in February, while the Nasdaq is about 3% below its record peaks reached in December.

At 11:39 a.m. ET, the Dow Jones Industrial Average .DJI fell 63.46 points, or 0.15%, to 42,699.41, the S&P 500 .SPX gained 4.89 points, or 0.08%, to 6,005.25 and the Nasdaq Composite .IXIC gained 59.40 points, or 0.30%, to 19,589.36.

Among market movers, shares of McDonald's MCD.N fell 1.4% after Morgan Stanley downgraded the stock to "equal-weight" from "overweight".

Five of the 11 major S&P 500 sub-sectors fell, with the financials sector .SPSY, down 0.8%, declining the most. On the flip side, information technology stocks .SPLRCT advanced 0.4%.

Most megacap and growth stocks were up. Nvidia NVDA.O gained more than 1%.

Tesla TSLA.O was down marginally after brokerage Baird downgraded the stock to "neutral".

Warner Bros Discovery WBD.O shares jumped 7.3%, the most on the S&P 500, after the company said it would separate its studios and streaming business from its fading cable television networks.

Robinhood Markets HOOD.O fell 4.5% after S&P Dow Jones Indices left S&P 500 constituents unchanged in its latest rebalancing, following recent speculation that the online brokerage would be added to the benchmark index.

Major data releases this week include readings on May consumer prices and initial jobless claims. While investors widely expect the Federal Reserve to keep interest rates unchanged next week, focus will be on any signs of pick-up in inflation as Trump's tariffs risk raising price pressures.

Advancing issues outnumbered decliners by a 1.99-to-1 ratio on the NYSE and by a 1.46-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 77 new highs and 33 new lows.