US STOCKS-Wall Street drops as tariff deadline looms

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* Qorvo, Skyworks rise on BAML upgrade
* 3M falls after Citigroup downgrade
* Merck to buy ArQule for $2.7 billion
* Indexes off: Dow 0.27%, S&P 500 0.13%, Nasdaq 0.14%

(Updates to early afternoon)
By Shreyashi Sanyal
Dec 9 (Reuters) - Wall Street's main indexes fell in
afternoon trading on Monday, with investors keeping a close
watch on U.S.-China trade relations as planned tariffs on
Chinese imports kick in on Dec. 15.
Beijing and Washington are negotiating a first phase trade
deal aimed at de-escalating tariff disputes but they continue to
wrangle over key details.
Analysts said markets are still hoping for a delay in the
deadline, while expecting more positive gestures from both
sides, but a lack of fresh update on trade talks sapped risk
appetite.
"There is optimism about the potential of a roll back or
some positive news on trade that is keeping stocks where they
are," said Randy Frederick, vice president of trading and
derivatives for Charles Schwab in Austin, Texas.
"But as always it ultimately depends on what we get from
President Donald Trump or China on what might be going on with
the trade deal."
The latest data from China showed exports in November shrank
for the fourth consecutive month, underscoring persistent
pressures on manufacturers from trade tensions. The S&P 500 came within striking distance of a record high
hit two weeks ago. The three indexes are now less than 1% away
from their all-time highs.
The Dow Jones Industrial Average .DJI was down 75.84
points, or 0.27%, at 27,939.22, the S&P 500 .SPX was down 4.02
points, or 0.13%, at 3,141.89.
The Nasdaq Composite .IXIC was down 12.54 points, or
0.14%, at 8,643.99.
CMC Markets analyst David Madden said, "The common theme
today is low volatility and small trading ranges but the
uncertainty surrounding trade is hanging over equities."
Also in focus is the Federal Open Market Committee's two-day
policy meeting, which starts on Tuesday.
3M Co MMM.N fell 0.7% after Citigroup cut its rating on
the industrial conglomerate's shares.
Apple suppliers Qorvo Inc QRVO.O and Skyworks Solutions
Inc SWKS.O rose about 2% each, after Bank of America Merrill
Lynch upgraded shares of both companies.
Merck & Co MRK.N dipped 0.2% after the drugmaker said it
would buy cancer drug developer ArQule Inc ARQL.O for $2.7
billion in cash. Shares of ArQule doubled in value following the
news. Advancing issues outnumbered decliners by a 1.17-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.13-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and one new low,
while the Nasdaq recorded 80 new highs and 44 new lows.