Stocks end mixed; Treasuries decline
U.S. equities edged higher and Treasuries declined on Wednesday as investors assessed the latest mixed developments in the U.S.-China and other trade disputes.
The Standard & Poor’s 500 index gained for a second day, getting a lift from banking stocks as the 10-year Treasury yield rose toward its highest level of the year.
Once again online giant Amazon Inc. moved the market after saying that it is considering opening as many as 3,000 cashierless stores. That sent grocery stocks down.
The dollar fell against most major currencies after a report said the U.S. and Canada are unlikely to reach a deal on the North American Free Trade Agreement in Washington this week. But shares of Caterpillar and Boeing helped push up the Dow Jones industrial average after China said it won’t devalue its currency.
That was good news after China on Tuesday announced a tariff increase on $60 billion of U.S. products in response to President Trump’s latest duty increase in a dispute over Beijing’s technology policy.
The announcement followed a warning by an American business group that a “downward spiral” in their conflict appeared certain after Trump imposed penalties on $200 billion of Chinese goods.
“We continue to ignore concerns over escalation of trade. We knew we’d get this latest round and that China would retaliate,” said Art Hogan, chief market strategist at B. Riley FBR Inc.
“Right now it feels like an endless round of one-upsmanship and tit-for-tat retaliation. The market is willing to look at this as a brutal negotiation process and not a mutually destructive trade war just yet,” he said.
While the threat to global growth remains, investors have had months to form a view on the trade war and stock markets have been signaling an improving sentiment of late: A basket of global shares is rising for the seventh time in eight sessions. But that perspective could be in jeopardy if tariffs have a bigger-than-expected effect on the economy.
And as the week grinds on, Brexit remains a key item on the agenda as the United Kingdom and European Union battle against the clock for an accord.
The S&P 500 index rose 3.64 points, or 0.1%, to 2,907.95. The Nasdaq composite fell 6.07 points, or 0.1%, to 7,950.04. The Dow gained 158.8 points, or 0.6%, to 26,405.76, touching the highest close since January. The Russell 2000 declined 8.04 points, or 0.5%, to 1,702.93.
The MSCI World Index of developed countries rose 0.4% to the highest in almost three weeks. The MSCI Emerging Market Index climbed 1.2%.
The yield on 10-year Treasuries rose two basis points to 3.08%. Germany’s 10-year yield gained less than one basis point to 0.49%. Italy’s 10-year yield gained six basis points to 2.852%.
Emerging-market equities advanced for the fifth time in six sessions as their currencies strengthened.
West Texas intermediate crude rose 1.9% to $71.15 a barrel. Gold climbed 0.4% to $1,203.15 an ounce.