US STOCKS-Wall Street falls amid caution on U.S.-China trade dispute

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* GM dips as UAW rejects latest offer
* Indexes down: Dow 0.4%, S&P 500 0.5%, Nasdaq 0.3%

(Updates to close)
By Caroline Valetkevitch
NEW YORK, Oct 7 (Reuters) - U.S. stocks eased on Monday as
reports on the U.S.-China trade front kept investors cautious
ahead of scheduled talks later in the week.
A report that Beijing was increasingly reluctant to agree to
a broad trade deal pursued by President Donald Trump weighed on
sentiment early.
But White House economic adviser Larry Kudlow helped ease
some anxiety, saying it was possible U.S. and Chinese trade
negotiators could make progress when they meet in Washington,
and said the United States was open to looking at what proposals
Beijing brought.
Stocks briefly traded higher in the afternoon after a Fox
reporter tweeted that the Chinese commerce ministry said China
is ready to do a deal with the United States on parts of
negotiations. U.S. and Chinese deputy trade negotiators launched a new
round of talks on Monday aimed at resolving the two nations'
15-month trade war, while the White House officially confirmed
that the high-level talks, involving Chinese Vice Premier Liu
He, U.S. Trade Representative Robert Lighthizer and Treasury
Secretary Steven Mnuchin would begin on Thursday. "The markets are trying to come up with some expectation for
the outcome of trade talks and figure out where and how they
want to price it in," said Shawn Cruz, manager of trader
strategy at TD Ameritrade in Jersey City, New Jersey.
The Dow Jones Industrial Average .DJI fell 95.7 points, or
0.36%, to 26,478.02, the S&P 500 .SPX lost 13.22 points, or
0.45%, to 2,938.79 and the Nasdaq Composite .IXIC dropped
26.18 points, or 0.33%, to 7,956.29.
Tariff concessions from the United States and China last
month had fueled hopes of a resolution to the prolonged dispute.
Anxiety over the trade war and mixed economic indicators has
been offset by increased expectations of a third interest rate
cut this year by the Federal Reserve.
"We had a pretty good rally back from the lows on Friday,
and we're sort of back into the middle of the recent trading
range," said Rick Meckler, partner at Cherry Lane Investments, a
family investment office in New Vernon, New Jersey.
"Investors are trying to balance what seems like a weaker
economy with low interest rates. What could change it could be
something coming out of the talks with China this week."
Investors will soon turn their focus to third-quarter
earnings, which begin next week with U.S. banks reporting, and
many hope to see more clarity on the impact of the trade war on
corporate America.
Analysts expect the lowest quarterly profit performance
since 2016, with S&P 500 earnings seen falling nearly 3% from a
year earlier, based on IBES data from Refinitiv. General Motors Co GM.N eased 0.5% after the UAW rejected
the carmaker's latest offer of a four-year labor contract.
Declining issues outnumbered advancing ones on the NYSE by a
1.59-to-1 ratio; on Nasdaq, a 1.37-to-1 ratio favored decliners.
The S&P 500 posted 10 new 52-week highs and 1 new low; the
Nasdaq Composite recorded 30 new highs and 91 new lows.
Volume on U.S. exchanges was 5.73 billion shares, compared
with the 7.23 billion average for the full session over the last
20 trading days.