Wall Street steadies after Lighthizer, Powell remarks
NEW YORK — The S&P 500 closed down slightly on Wednesday but well above its session low after testimonies to US Congress from trade and central bank officials as well as President Donald Trump’s former lawyer brought few major surprises.
US Trade Representative (USTR) Robert Lighthizer told a congressional hearing the US and China still had hard work ahead to settle their trade dispute in his first public comments since Mr. Trump announced a delay to Chinese import tariffs on Sunday.
Federal Reserve Chairman Jerome Powell told Congress the central bank would stop shrinking its $4-trillion balance sheet this year, ending a process investors say is at cross-purposes with its current pause on interest rate hikes.
The S&P had drifted gradually higher after hitting a session low around 10.30 a.m. and swerved in and out of positive territory in afternoon trading.
“The two things that have been market drivers have been central bank policy and trade negotiations. Two of the most important guys in those areas testified today. When they said reasonable and measured things, (stocks) recovered,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
Also on Wednesday, Mr. Trump’s former lawyer Michael Cohen called the president a “conman” but said he had no direct evidence Mr. Trump colluded with Moscow to bolster his White House campaign ahead of the 2016 election. Brian Belski, chief investment strategist at BMO Capital Markets in New York said the market recovered when investors realized there would not be “some kind of bombshell out of Cohen’s testimony.”
He also saw India-Pakistan tensions as a support for US assets as investors sought alternatives to emerging markets.
The Dow Jones Industrial Average fell 72.82 points or 0.28% to 25,985.16; the S&P 500 lost 1.52 points or 0.05% to 2,792.38; and the Nasdaq Composite added 5.21 points or 0.07% to 7,554.51.
Optimism on trade and Fed policy had boosted equities from December lows in recent weeks, with the S&P 500 index roughly five percent below its record closing high hit in late September.
“Investors are stepping back and taking a pause to see how these news events play out,” Carol Schleif, deputy chief investment officer, Abbot Downing in Minneapolis, MN.
Of the 11 major S&P sectors, seven closed lower with the health care index 0.5% decline weighing the most. Health insurer and pharmacy benefit manager shares slipped after a Senate hearing and the introduction of a bill aimed at moving all Americans into a government health insurance program on Tuesday.
Declining issues outnumbered advancing ones on the NYSE by 1.05 to 1; on Nasdaq, a 1.07-to-1 ratio favored advancers. The S&P 500 posted 25 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 58 new highs and 30 new lows. Volume on US exchanges was 7.30 billion shares, compared with the 7.34 billion average for the last 20 trading days. —