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Wall Street reverses losses after White House adviser's trade remarks

Stock MarketsNov 27, 2018 04:45PM ET
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© Reuters. Traders work on the floor of the NYSE in New York

By Stephen Culp

NEW YORK (Reuters) - The S&P 500 and the Dow Jones Industrial Average edged higher on Tuesday after White House economic adviser Larry Kudlow said a meeting between President Donald Trump and his Chinese counterpart on Saturday was an opportunity to "turn the page" on a trade war.

All three of Wall Street's major indexes reversed losses following Kudlow's comments days ahead of the high-stakes dinner between Trump and Xi Jinping after the G20 summit in Buenos Aires.

But Kudlow also said the White House has been disappointed so far in China's response to trade issues with the United States. On Monday, Trump threatened to move ahead with additional tariffs on Chinese goods, due to take effect on Jan. 1.

"The volatility we're seeing this afternoon is related to Kudlow's comments," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "Across all sectors you see the market bouncing up and down and being very unsettled. And it's primarily the tariff issue overhanging the market."

General Motors Co (N:GM) shares dropped 2.5 percent after Trump warned subsidies could be cut after the automaker said it would shutter U.S. plants and lay off thousands of workers.

"The GM thing is a war of words," Ghriskey said. "Here's a company trying to react to the market environment ... and they're being criticized for it."

The Dow Jones Industrial Average (DJI) rose 108.49 points, or 0.44 percent, to 24,748.73, the S&P 500 (SPX) gained 8.75 points, or 0.33 percent, to 2,682.2 and the Nasdaq Composite (IXIC) added 0.85 point, or 0.01 percent, to 7,082.70.

Of the 11 major sectors in the S&P 500, all but three closed the session in positive territory. Healthcare (SPXHC) was the biggest percentage gainer with a 0.99 percent increase, followed by gains in defensive sectors such as consumer staples (SPLRCS), utilities (SPLRCU) and real estate <.SPLRCR>.

Trade-sensitive industrials (SPLRCI) and materials (SPLRCM) sectors were down, as was energy (SPNY).

U.S. steel company stocks dropped as China's steel sector slid into bear territory, with the benchmark rebar contract down more than 20 percent from its 2018 peak. US Steel Corp (N:X) slid 8.3 percent, while AK Steel Holdings (N:AKS) fell 4.6 percent.

Budget airline Spirit Airlines Inc (N:SAVE) took off, its stock rising 15.3 percent after hiking fourth-quarter unit revenue guidance.

Shares of drugmaker Bristol-Myers Squibb Co (N:BMY) fell after its lung cancer therapy fell short of goals in a late-stage trial. Its shares closed down 3.0 percent.

United Technologies Corp (N:UTX) dropped 4.1 percent following its announcement late Monday that it would divide its aerospace, elevators and building segments into three discrete companies.

Federal Reserve Chairman Jerome Powell is expected to speak on Wednesday, and investors will scrutinize his comments over U.S. economic health and trade concerns.

Declining issues outnumbered advancing ones on the NYSE by a 1.57-to-1 ratio; on Nasdaq, a 1.94-to-1 ratio favored decliners.

The S&P 500 posted four new 52-week highs and nine new lows; the Nasdaq Composite recorded 15 new highs and 144 new lows.

Volume on U.S. exchanges was 6.79 billion shares, compared with the 7.90 billion-share average over the last 20 trading days.

Wall Street reverses losses after White House adviser's trade remarks
 

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Bobster Bambino
Bobster Bambino Nov 27, 2018 11:06AM ET
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Expectations are already low shouldnt effect the market
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Mike Payne
Mike Payne Nov 27, 2018 11:06AM ET
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Shoulda waited like 5 more minutes before posting this ! :p
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