TOKYO (AP) -- Asian shares were mostly lower Thursday as optimism about progress in trade talks between the U.S. and China started wearing thin.
Japan's benchmark Nikkei 225 slipped 0.7 percent in afternoon trading to 21,456.01. Australia's S&P/ASX 200 edged up 0.3 percent to 6,263.90. South Korea's Kospi dropped 0.5 percent to 2,165.79. Hong Kong's Hang Seng dipped 0.9 percent to 28,787.30, while the Shanghai Composite gained 0.1 percent to 3,106.42.
On Wall Street, health care companies led U.S. stocks broadly lower Wednesday, giving the market its third straight loss. Technology and energy stocks also bore the brunt of the selling, offsetting gains in materials and utilities companies. Several retailers also rose. Smaller companies fell more than the rest of the market.
The S&P 500 dropped 0.7 percent to 2,771.45. The benchmark index is now on track for its first weekly decline since January. The Dow Jones Industrial Average fell 0.5 percent to 25,673.46. The Nasdaq composite lost 0.9 percent to 7,505.92 and the Russell 2000 index of smaller companies gave up 2 percent, to 1,536.82.
Disappointing economic reports, uncertainty over trade and fears of a slowdown in economic growth have been weighing on the market the past couple weeks.
New U.S. economic data on Wednesday did little to encourage investors. Payroll processor ADP said U.S. businesses added 183,000 jobs in February, below the 188,000 that analysts expected. Meanwhile, the Commerce Department said the U.S. trade deficit jumped 19 percent in December, widening the figure to a decade-long high of $621 billion.
"Things aren't going to plan in Trump's tariff world with U.S. trade data overnight showing the trade deficit blew out to a 10-year high in 2018," Jeffrey Halley of Oanda said in a commentary. "Whether this hardens the President's attitude to a structural deal with the China trade talks or he chooses a quick win is hard to say," he added.
Optimism over the prospects that the U.S. and China will resolve their trade dispute has faded, though U.S. and Chinese officials have hinted that some kind of agreement could be finalized by the end of March, with President Donald Trump and President Xi Jinping possibly meeting to formalize the deal at Trump's private club in Mar-a-Lago, Florida.
Last year, Trump imposed a series of tariffs on Chinese goods in hopes of pressuring Beijing to support more favorable terms for the United States. In June, the White House levied import taxes of 25 percent on $50 billion of Chinese imports. It followed in September with 10 percent duties on an additional $200 billion.
Asian investors were also staying cautious ahead of a European Central Bank board meeting later in the global day.
ENERGY: U.S. crude was flat at $56.22 a barrel in electronic trading on the New York Mercantile Exchange. It slid 0.6 percent on Wednesday. Brent crude, used to price international oils, added 15 cents to $66.14 a barrel in London.
CURRENCIES: The dollar fell to 111.75 yen from 111.86 yen Wednesday. The euro strengthened to $1.1309 from $1.1304.