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By Mark DeCambre, MarketWatch , Joy Wiltermuth

Mnuchin says U.S. was '90% of the way there' on China trade deal

Stocks on Wednesday afternoon were losing ground after an earlier climb, spurred by Micron Technologies's quarterly results, faded.

The Dow Jones Industrial Average was up 19 points, or less than 0.1%, to 26,567, but had been as high as 26,669, while the S&P 500 was down 2 points, or 0.1%, at 2,915, weighed by a decline in the real estate and utilities sector, both down by about 2%, representing the worst performers among the index's 11 sectors. The Nasdaq Composite Index rose 23 points, or about 0.3%, to 7,908.

Comments from U.S. Treasury Secretary Steven Mnuchin suggesting that a Sino-American trade resolution had been near (https://www.cnbc.com/2019/06/26/mnuchin-says-us-china-trade-deal-was-90-percent-complete.html), provided an early lift to markets. "We were about 90% of the way there (with a deal) and I think there's a path to complete this," he told the financial network in Bahrain.

The U.S. Treasury Secretary said he was "hopeful" that a deal could be struck as the market awaits a sideline conversation between President Donald Trump and Chinese President Xi Jinping at the Group of 20 gathering in Osaka, Japan, which kicks off on Friday.

But optimism over the prospects for a trade war detente tempered during the session.

"I am not optimistic of anything of significance to be achieved for the meetings in Japan this week," said Mariann Montagne, a portfolio manager at Gradient Investments, in a telephone interview.

"Mnuchin or members of his team have used that phrase several times over the past several months," she told MarketWatch. "I think people are getting too excited."

In April, Mnuchin said U.S.-China trade talks were in the "final laps (https://www.nytimes.com/2019/04/28/us/politics/mnuchin-china-us-trade-negotiations.html)."

Separately, President Trump, appearing on Fox Business on Wednesday said that he was happy to collect China tariffs (http://www.marketwatch.com/story/trump-today-president-threatens-tariffs-on-china-as-he-jokes-draghi-should-lead-fed-2019-06-26) if talks broke down.

Concerns about escalating trade tensions between China and the U.S., the world's largest economies, have fed a sense of rising uncertainty about the health of the global economy, at least partly contributing to central banks across the world signaling a willingness to reinstitute a fresh wave of economic stimulus.

"Certainly, when we came in pre-open, futures were higher on the Mnuchin comments," said Sahak Manuelian, an equities trader at Wedbush Securities.

"It seems things are starting to fall off a bit."

On Tuesday (http://www.marketwatch.com/story/stock-index-futures-point-cautiously-higher-as-investors-await-g-20-meeting-2019-06-24), equity markets suffered one of the worst declines in about a month, led by a selloff in trade-sensitive technology shares.

"It's a bit of wavering ahead of the G-20," said Jeff Kleintop, chief global investment strategist at Charles Schwab, in an interview. "The markets have priced in a delay to the implementation of the next round of tariffs, through next month, on $300 billion of Chinese goods."

But Kleintop also cautioned that stocks, near all-time highs, may be seeing an overabundance of confidence.

"If it's trade or another factor, the market does feel vulnerable to a setback," Kleintop said.

Tuesday's slump in stocks came after Federal Reserve Chairman Jerome Powell, speaking at the Council on Foreign Relations in New York, signaled that an interest-rate cut in July isn't a done deal, and St. Louis Fed President James Bullard said isn't advocating for an aggressive cut of 50 basis point in federal-funds rates when the Fed meets next month.

Read: Fed's Bullard says he is not in favor of half point rate cut in July (http://www.marketwatch.com/story/feds-bullard-says-he-is-not-in-favor-of-half-point-rate-cut-in-july-2019-06-25)

Check out: Powell says the Fed is 'grappling' with whether to cut interest rates (http://www.marketwatch.com/story/powell-says-the-fed-is-grappling-with-whether-to-cut-interest-rates-2019-06-25)

U.S. economic data published Wednesday was again weak, with durable-goods orders for May dropping 1.3%, weighed down by Boeing Co.'s (BA) woes from its grounded 737 MAX jets.

Check out: Durable-goods orders drop 1.3% in May, but business investment picks up in reassuring sign (http://www.marketwatch.com/story/durable-goods-orders-drop-13-in-may-but-business-investment-picks-up-in-reassuring-sign-2019-06-26)

A separate report on international trade in goods also showed the U.S. trade deficit climbed 5.1% for the same month which was wider than expected.

Read: U.S. trade deficit in goods widens 5.1% to $74.5 billion in May (http://www.marketwatch.com/story/us-trade-deficit-in-goods-jumps-51-to-745-billion-in-may-2019-06-26)

Which stocks are in focus?

Shares of Apple Inc.(AAPL) were in focus after the iPhone maker and tech giant acquired autonomous-driving startup Drive.ai (http://www.marketwatch.com/story/apple-buys-autonomous-car-startup-driveai-reports-2019-06-25), according to multiple reports. Apple confirmed the deal to both Axios and the San Francisco Chronicle (https://www.sfchronicle.com/business/article/Drive-ai-a-self-driving-car-startup-once-worth-14047625.php). Shares of Apple were up 4% on Wednesday.

Micron Technology Inc. shares (MU) rose 13% on Wednesday after the memory-chip maker's results topped expectations (http://www.marketwatch.com/story/micron-stock-surges-after-hours-as-earnings-top-lowered-expectations-2019-06-25) for the quarter, and executives forecast improvement in the fourth quarter.

That was good news for other semiconductor companies. Shares of Advanced Mico Devices(AMD) climbed more than 3%; Nvidia Corp. almost 9% and shares of exchange-traded semiconductor fund iShares PHLX Semiconductor ETF (SOXX) climbed 1.8%.

Shares of Boeing (BA) were up more than 2% on Wednesday.

Consumer-goods giant General Mills(GIS) shares fell more than 4%, a day after it reported disappointing sales for its fiscal fourth-quarter (http://www.marketwatch.com/story/general-mills-stock-falls-after-profit-beats-but-sales-come-up-short-2019-06-26).

Shares of retailer Big Lots(BIG) gained 2.5% after the retailer said it would appoint former Abercrombie & Fitch veteran Jonathan Ramsden as chief financial officer in August.

FedEx Corp(FDX) shares bumped up more than 2% a day after it beat earnings estimates (http://www.marketwatch.com/story/fedex-shares-tick-down-after-earnings-beat-2019-06-25).

(END) Dow Jones Newswires

June 26, 2019 14:56 ET (18:56 GMT)

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