By Chris Matthews and Mark DeCambre, MarketWatch
China pushed to end punitive trade tariffs ahead of G-20
meeting
The S&P 500 halted a four-day slump but the Dow marked its
longest skid since March as investors awaited U.S.-China trade
talks between President Donald Trump and China's President Xi
Jinping during the G-20 meeting in Japan that begins Friday.
How did benchmark fare?
The Dow Jones Industrial Average edged 10.24 points, or less
than 0.1%, lower at to close at 26,526.58, marking a third straight
decline, its longest slump since a five-session decline ended March
8, according to FactSet data. Meanwhile, the S&P 500 index rose
11.14 points, or 0.4%, to finish at 2,924.92, and the Nasdaq
Composite Index finished 57.79 points, or 0.7%, higher at
7,967.76.
The Dow is on pace for its best June return, up 6.9%, since
1938, while the S&P 500 is on track for its best June since
1955, up 8.2%, according to Dow Jones Market Data.
What were the drivers?
A tariff cease-fire between Beijing and Washington would avert
the next round of tariffs on additional $300 billion worth of
Chinese imports.
The Wall Street Journal reported that Xi will present President
Donald Trump terms to resolve a market-rattling trade confrontation
ahead of the expected the Group of 20 gathering of developed
countries set to take place this weekend.
Terms include the removal of a ban on the sale of U.S.
technology to Chinese telecommunications giant Huawei Technologies
Co., the removal of punitive import duties, and an end to a request
for China to buy additional U.S. exports.
The demands raise some doubts that the two sides can achieve a
detente and comes after a report
(http://www.marketwatch.com/story/us-china-reach-tentative-tariff-truce-report-2019-06-26)
from the South China Morning Post
(https://www.scmp.com/economy/china-economy/article/3016255/trade-war-us-and-china-agree-tentative-truce-g20-summit)that
a tentative U.S.-China truce had been achieved.
Comments from Larry Kudlow, National Economic Council director,
added to the uncertainty around trade. Kudlow told Fox News that no
preconditions were set ahead of Trump's meeting with Xi. He also
said the U.S. may move forward with additional tariffs.
"The more optimistic tone earlier was due to some positive
headlines regarding this weekend's meeting between President Trump
and President Xi," wrote Bespoke Investment Group's Paul Hickey, in
a Thursday note to clients. "But some of the air was let out of the
balloon following a less optimistic tone from the WSJ."
On the economic data front, the Commerce Department issued its
final revision of first quarter GDP growth
(http://www.marketwatch.com/story/first-quarter-gdp-left-at-31-as-stronger-business-investment-offsets-weaker-consumer-spending-2019-06-27)
and said the U.S. economy grew at a solid rate of 3.1% in the first
quarter, but consumer spending and business investments grew at a
slower pace than in the earlier estimates.
The Labor Department said initial claims for unemployment
benefits rose 10,000 to 227,000
(http://www.marketwatch.com/story/jobless-claims-climb-to-7-week-high-of-227000-2019-06-27)
in the seven days ended June 22, compared with the week prior.
Economists polled by MarketWatch estimated new claims would total
216,000.
Which stocks were in focus?
Boeing Co. shares(BA) fell 2.9% after the Federal Aviation
Administration said on Wednesday that it has found an issue with
the 737 MAX that the manufacturer must address before it lifts the
national grounding order.
Shares of Ford Motor Co. (F) gained 2.9% after officials
announced 12,000 job cuts in Europe by the end of 2020 and stated
that its European operations were on track to improve by the end of
2019.
Lyft Inc.'s stock (LYFT) rose 1.7%, after news that autonomous
vehicle firm Waymo, which is a subsidiary of Google-parent Alphabet
Inc. (GOOGL)(GOOGL), has officially launched a program to make some
self-driving minivans available for Lyft customers. The program is
only available in a small area outside Phoenix.
Rite Aid Corp. (RAD)announced first-quarter financial results
(http://www.marketwatch.com/story/rite-aid-stock-falls-10-after-larger-than-expected-quarterly-loss-2019-06-26)
Wednesday evening, reporting a larger-than-expected loss and no
revenue growth. However, shares of the retailer soared 21%
Thursday. Rival Walgreens Boots Alliance Inc. (WBA), meanwhile,
reported better-than-expected
(http://www.marketwatch.com/story/walgreens-stock-up-1-after-earnings-beat-2019-06-27)
fiscal third-quarter earnings on Thursday morning sending to a 4.1%
gain.
Shares of Conagra Brands, Inc. (CAG) tumbled 12.1%, after the
processed and packaged-foods manufacturer reported
worse-than-expected fourth-quarter
(http://www.marketwatch.com/story/conagra-shares-sink-after-earnings-and-sales-miss-expectations-2019-06-27)earnings
and sales Thursday morning.
How did other markets trade?
The yield on the 10-year U.S. Treasury note fell less than a
basis point to 2.007%. Goldman Sachs cut its year-end forecast to
1.75%, the same as JPMorgan Chase & Co. The 10-year yield has
fallen from 2.4% at the beginning of the quarter.
In Asia, Japan's Nikkei 225 jumped 1.2% overnight, while China's
Shanghai Composite Index fell 0.7%. Hong Kong's Hang Seng index
rose 1.4%. In Europe, the Stoxx Europe 600 ended flat.
In commodities markets, the price of crude oil was little
changed around $59.43 a barrel. Gold gold prices slipped for a
second day after reaching a six-year high earlier this week. The
U.S. dollar was trading flat, as measured by the ICE U.S. Dollar
Index at 96.21.
(END) Dow Jones Newswires
June 27, 2019 16:52 ET (20:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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