Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Stocks - Trade Uncertainty Takes the Fizz out of Rally

Published 11/06/2019, 03:48 PM
Updated 11/06/2019, 04:54 PM
© Reuters.

© Reuters.

Investing.com – Many investors want or expect stocks to move higher, but a little buyer reluctance took over the stock market on Wednesday.

The caution was caused in large part by news reports that the signing of a U.S.-China trade deal may be delayed until December, assuming a site for the signing can be chosen and the last details negotiated.

The S&P 500 finished up 2 points, and traded within a range of about 12.5 points. The Dow Jones industrials were basically flat at 27,492.56, and the Nasdaq Composite dropped 0.3% 8,410.63.

The number of stocks hitting 52-week highs fell to 117 on Wednesday from 285 on Tuesday.

The wrinkle in the trade deal was born out of Chile's decision to cancel the Asia-Pacific Economic Cooperation summit. It was to be held this month in Santiago, with President Donald Trump and Chinese President Xi Jinping to sign the trade deal at that time.

But local protests about economic conditions turned nasty, forcing the Trump Administration and Xi's government to work on finding a new site, possibly in Sweden or Switzerland.

The final details of what is expected to be the first of several agreements are still being negotiated. A key detail for China is for the U.S. to scrap tariffs, due in December, on $156 billion in goods including cell phones, laptop computers and toys. It also wants relief on tariffs imposed in September on goods including machinery, semiconductors and furniture.

So, the market stalled. The S&P 500 had risen 6.34% between Oct. 8 and its closing high of 3,078 on Monday, a fairly rapid rise, especially considering the index is up 22.7% on the year. Clearly, some traders saw the trade news and decided to wait.

What little excitement came on a Wall Street Journal report that Xerox (NYSE:XRX) might try to take over computer-maker HP Inc. (NYSE:HPQ), better known as simply Hewlett-Packard. HP was up 6.4%. Xerox rose 3.6%, both among the 10 biggest S&P 590 gainers on the day.

While 20 Dow stocks were higher, Boeing (NYSE:BA) was off 1.1%, and Walgreens Boots Alliance (NASDAQ:WBA) dropped 2.8% as excitement faded that the pharmacy giant might try to go private. One reason is that Stephen Schwarzman, CEO of Blackstone (NYSE:BX) Group called the idea "a stretch." Blackstone has been involved in many of the largest buyouts.

The declines for Boeing and Walgreens subtracted more than 39 points from the Dow on a day when Apple (NASDAQ:AAPL) was up 0.04% and Microsoft (NASDAQ:MSFT) slipped 0.28%.

Health, real estate, consumer staples and financial stocks were the market leaders. Energy shares were lower as oil prices fell in response to the trade-deal news.

Interest rates also moved lower with the United States 10-Year Treasury yield down to 1.821% from Tuesday's 1.865%. Gold was up $9.40 to $1,493.10 in New York as some investors looked for safe havens.

Cosmetic company Coty (NYSE:COTY), health company DaVita HealthCare Partners (NYSE:DVA), Hewlett-Packard (NYSE:HPQ) and CVS Health (NYSE:CVS) were the S&P 500 leaders.

Diamondback Energy (NASDAQ:FANG), packaging company Sealed Air (NYSE:SEE), drugmaker Perrigo (NYSE:PRGO) and Occidental Petroleum (NYSE:OXY) were the S&P 500 laggards.

Latest comments

The only Trade Certainty is that Trump is the worst negotiator in presidential history. Guy has no idea how to close a deal.
Tomorrow's headline:"Stocks - Trade Certainty Takes the Rally to All Time Highs"
"..the signing of a U.S.-China trade deal may be delayed until December, assuming a site for the signing can be chosen and the last details negotiated .." --- Good luck with THAT (the last details negotiated ..) Ha, Ha! --- The only chance of getting the last details negotiated is if D.Trumpet goes to Bejing on Dec 24th 2019, A great accomplishment to get the last details signed off on for a minor humiliation to show up at the prince's door ... -- Let the great deal maker and American bully president do exactly THAT. -- He took up the presidency to find himself, psychologically, and to find his limits, so let the great statesmen of the world teach D.Trumpet a lesson of the limits. --- After all D.Trumpet is on his last legs of this presidency and likely won't learn too many lessons unless someone rubs his nose into the d'ir_t like he has done to others before whenever he ab'us_ed his power with the weaker members of society
you hate success. what would you have done, it looks like nothing. easy to criticize. hard to succeed. your a loser
Yeah i was short the xle via puts but couldnt fil the gap on the nov opex chart. Hoping tomorrow. Also started shorting xlf for same opex. This trade deal nonsense is really overdone IMO. I dont believe market participants are even listening anymore. Even the black. Oxes appear silent on the issue, cause if crude moved down on trade then one would think that NATGAS would have done the same but it was flat. I was long on gap fill ladt week, but took it off the table now waiting on another retrace to last gap. Good read tho, thanks
These markets are attracting normal people to put savings in it and big investors are taking their money out of the markets. Markets will go down soon. Please be smart and take your money out.
Trump might get a trade deal with China, but it will be absolutely nothing like what he promised before the election. But, of course, he’ll tell his base it’s a “perfect deal.” Yet another in a long list of unkept Trump claims from 2016. The same guy who said he would hire only the very best people....if so, why more turnover than any POTUS in history? What a joke!
Right, I wonder who re-elects a leader who can't wrap his mind around the mechanics of teamwork.--- Nobody can lead any bigger organization responsibly without needing to fix a bad trail of abuse for decades later. Look at all the failures of autocratic leaders when history finally wrestled the reigns out of their hands. --- When East Germany had its wall falling it was an environmental, humanitarian and financial disaster that took decades to bring back to average. Look at China, an environmental, financial ($US40T in debt) and humanitarian mess that will take multi-decades to fix. Wherever Chinese people land they are zombies trying to recover from decades of brainwashing.
hello sir good morning how are you doing how are you work how will market
Bulls Are Increasing Well.
We are at the top for now
Dow going down
Luring innocent novice bulls... Really
.., luring with FOMO ;)
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.