Markets closed mostly lower on Wednesday as investors remained uncertain of a positive outcome to a crucial meeting between President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Japan later this week. Technology stocks, however, bucked the declining trend and ended in the green banking on Micron’s upbeat guidance.
The Dow Jones Industrial Average (DJI) decreased 0.04%, to close at 26,536.82. The S&P 500 decreased 0.1% to close at 2,913.78. The tech-laden Nasdaq Composite Index closed at 7,909.97, gaining nearly 0.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 0.43% to close at 16.21. Advancers outnumbered decliners on the NYSE by a 1.37-to-1 ratio. A 1.19-to-1 ratio favored advancers on Nasdaq.
Comments from Mnuchin on U.S.-China Trade Deal
Treasury Secretary Steven Mnuchin told CNBC on Jun 26 that United States and China were close to a trade deal, and expressed his optimism around this weekend’s Trump-Jinping talks. Mnuchin’s comments lifted markets earlier in the session.
“We were about 90% of the way there [with a deal] and I think there’s a path to complete this,”Mnuchin said. However, optimism over a possible trade deal faded during the trading session as analysts doubted whether at all the deal between U.S.-China gets settled. After all, President Trump suggested that he is happy to collect tariffs from China if both the countries are unable to reach a significant trade deal.
Trump said, “My Plan B with China is to take billions and billions a month…and we’ll do less business with them.” The president also said that should the trade negotiations reach a point of no return, he would levy taxes on Chinese goods that aren’t already under the tariffs umbrella.
Tech Bounced Back on Micron Outlook
Micron Technology Inc. (NASDAQ:MU) reported quarterly earnings of $1.05 per share, which easily beat the Zacks Consensus Estimate of $0.78 per share. In fact, the Micron stock was up more than 13% on Jun 26 on the company’s upbeat outlook. Micron Chief Executive Sanjay Mehrotra said that demand for DRAM is expected to “return to healthy year-over-year growth” in the fourth quarter. He cited that the demand for NAND is also rising “as elasticity kicks in response to price declines over the last year”.
Micron’s upbeat guidance helped semiconductor stocks climb higher. Some of the notable chip stocks including NVIDIA Corporation (NASDAQ:NVDA) and On Semiconductor (NASDAQ:ON) saw their shares gain 5.1% and 4.2%, respectively. Both companies carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Durable Goods Numbers Discouraging
When it comes to economic data, U.S. durable-goods orders dropped 1.3% in May. This dip marks the third time in four months, which was largely because of The Boeing Company’s (NYSE:BA) issues with its 737 Max jets, which were grounded globally after two fatal crashes earlier this year.
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The Boeing Company (BA): Free Stock Analysis Report
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