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Walmart, BHP Group, Philips Rise Premarket; Home Depot, Zoom Fall

Dow Clings to Gains as Defensive Stocks Lead Amid Rising US-China Tensions

Stock Markets Jul 22, 2020 03:34PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – Wall Street inched higher on Wednesday as defensive stocks kept the broader market above the flatline amid falling energy stocks and rising U.S.-China tensions.

The Dow Jones Industrial Average rose 0.43%, or 114 points. The S&P 500 gained 0.32%, while the Nasdaq Composite slipped 0.05%.

In a sign that risk appetite is cooling, investors piled into utilities and real estate.  

The U.S. government ordered the closure of the Chinese consulate in Houston citing natural security concerns. In response, China reportedly said it was mulling closing U.S. consulate in Wuhan.

The simmering U.S-China tensions added a semblance of caution on Wall Street at a time when the rapid spread of the coronavirus showed little sign of abating.  

The number of confirmed U.S. coronavirus cases climbed topped 3.9 million, according to Johns Hopkins data, the most in the world.

The pace of infections has led some states to reverse recent reopening measures, sparking concerns that the U.S. economic recovery could be somewhat timid.

The latest weekly U.S. petroleum data served to highlight cracks in the economic recovery as crude stockpiles unexpectedly rose, renewing worries about the strength of oil demand.

Oil prices fell 1% and dragged energy stocks lower to keep gains in the broader market in check.

Health care stocks received a boost from a jump in shares of Pfizer (NYSE:PFE) and Biontech (NASDAQ:BNTX) - which are jointly developing a potential coronavirus vaccine - having secured a $1.95 billion deal from the U.S. government for 100 million doses of their potential coronavirus drug.

The earnings front offered a mixed picture as a few notable names such as Best Buy and Snap reported contrasting quarterly results.

Snap (NYSE:SNAP) fell 6.3% after its quarterly earnings and revenue beat were overshadowed by signs of slowing user.

Best Buy (NYSE:BBY) jumped 8.6% after the retailer said sales in the second quarter jumped 255% year-over-year, as the company’s strategy to reposition its business paid off. Still, some on Wall Street warned there could be pain ahead for the electronics retailer.

"Best Buy mitigated the negative impact of the pandemic by making rapid adjustments, but trends will be hard to sustain with high unemployment," Wedbush said.

In economic news, the housing market showed little signs of weakness in the wake of rising cases, which have caused some states to roll back reopening measures.

Existing home soared 20.7% in June from the prior month to a seasonally adjusted annual rate of 4.72 million, the biggest monthly increase on record, though that did fall short of economists' forecasts for a 24.5% increase.

Dow Clings to Gains as Defensive Stocks Lead Amid Rising US-China Tensions
 

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Comments (4)
Thom Miller
Thom Miller Jul 22, 2020 4:01PM ET
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Funny how about two weeks ago many folks on here were bragging about selling everything short. Now they never utter a peep. They must all be in a bread line somewhere....
Samui Lo
Samui Lo Jul 22, 2020 3:37PM ET
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Nothing matters anymore, bad news defensive stocks gain, small beat on ridiculously low estimates it gains too, potential vaccine nobody knows when gains... but worst Covid death in two months nah doesn't matter, earning 20% down doesn't matter, China-USA conflict who cares, destruction on tens of thousands of jobs in travel industry nahhhh. Gamble gamble gamble the only way is up.
Pullover Det
Pullover Det Jul 22, 2020 3:37PM ET
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Couldnt be written better👍
Tom Pym
Tom Pym Jul 22, 2020 3:37PM ET
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I hope you realize stocks are only worth what people are willing to pay for them.  Everything else is a non issue.  That's why some beaten up classic cars fetch more money than brand new ones no matter how "fundamentally better" the new one may be than the classic.  Some stocks will be worth more than others no matter how "fundamentally better" or worse they may be.  Keep that in mind and you'll be less angry at the market.
eddie glass
eddie glass Jul 22, 2020 1:59PM ET
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nonsense, of all of 2016-2019 they said the USS would pump up and PMs dump with US-China tensions. i  trade PMs and USD so know this, USD rose to near all time highs and PMs dumped and every garbage article like this said "USD up due to US-China tensions"... at least you get an A for creativity not just saying the word "Virus" in the title... which is also garbage just like the "trade deal" headlines every day for the past 4 years
eddie glass
eddie glass Jul 22, 2020 1:59PM ET
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*USD not USS
Thom Miller
Thom Miller Jul 22, 2020 1:59PM ET
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Liar
Fernando Lazarini
Fernando Lazarini Jul 22, 2020 1:41PM ET
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What´s China compared to USA? Hopefully I live in the West. I do hope the comunist party falls down.
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Joseph Chong
trader99 Jul 22, 2020 1:41PM ET
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Clearly you have never been to China or lived out of America.  However on a factual standpoint: China owns over 1 trillion in US government bonds The US government has over 1 trillion in deficit while still having a budget of 731 billion for military.  Russia and China (who they are soooo scared of for whatever reason) combine only has below 300 billion. I know US wants China to go down and they will stop at nothing, it will be interesting to see what happens and even more interesting to trade it :)  What happened today in Houston is interesting and I can't wait to see what continues on in this fun world of ours this year *Not a political person. I only see facts and trade them.
Hao Yu
Hao Yu Jul 22, 2020 1:41PM ET
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US is a free country now? Can they breath now? Well, good for them.
Thom Miller
Thom Miller Jul 22, 2020 1:41PM ET
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Hao Yu Can they breath now? Not funny. Bad taste. How would you like it if someone asked in poor English, “Is Yu on first?”
Fernando Lazarini
Fernando Lazarini Jul 22, 2020 1:41PM ET
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Thom Miller  Hao are Yu?
Tom Pym
Tom Pym Jul 22, 2020 1:41PM ET
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Thom Miller  He made a valid point though.  A truly free country wouldn't have the racial inequality issues.  He struck a nerve and it shows.
 
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