U.S. stocks finished mixed Wednesday as only the Nasdaq Composite was able to extend its winning streak with the boost in sentiment from a preliminary U.S.-China trade deal tailing off by the end of the session.
The likely impeachment of President Trump by the U.S. House of Representatives in Washington later Wednesday held little risk for investors, analysts noted.
What are major indexes doing?
The Dow Jones Industrial Average DJIA, -0.10% fell 27.88 points, 0.1%, to close at 28,239.28, while the S&P 500 SPX, -0.04% shed 1.38 points, less than 0.04%, to finish at 3,191.14. The Nasdaq Composite Index COMP, +0.05% was up 4.38 points, less than 0.05%, to end at 8.827.73, a new record close.
The Nasdaq saw its fifth consecutive record close, the longest record streak since January 2018.
Major indexes scored their fifth straight gain Tuesday, with all three logging the latest in a series of record finishes, albeit after modest gains. The Dow on Tuesday rose 31.27 points, or 0.1%, to end at 28,267.16, while the S&P 500 eked out a gain of 1.07 points, or less than 0.1%, to finish at 3,192.52. The Nasdaq Composite closed at 8823.36 after a gain of 9.13 points, or 0.1%.
What’s driving the market?
The U.S. – China trade deal announced Friday has provided intermittent support for equities this week, as it partially rolls back some existing tariffs on Chinese imports and scraps plans for additional levies ahead of a Dec. 15 deadline. While it could benefit American farmers, skepticism lingers over the targets set by U.S. negotiators.
“In the absence of fresh details on the terms of the deal or when it is expected to be signed, there was some nervousness in the markets,” said Raffi Boyadjian, senior investment analyst at XM, in a note. “However, even without any new drivers, the injection of positive sentiment from the announcement of the deal is likely to be enough to last till the end of the year as trading winds down during the Christmas and New Year period.”
In an interview with Fox Business on Tuesday, Robert Lighthizer, the U.S. Trade Representative, also suggested the Trump administration was ready to escalate its trade confrontation with the EU, potentially through new tariffs, after sealing a truce with China and enacting the USMCA agreement with Canada and Mexico to replace NAFTA.
Meanwhile, investors appeared less gloomy over global economic prospects. A gauge of German business sentiment, the Ifo business-climate index, came in at a stronger-than-expected 96.3 points Wednesday morning, rising from an upwardly revised 95.1 in November and topping forecasts for a reading of 95.5.
While stocks are supported by the partial resolution of the U.S. – China trade war this week, the Federal Reserve is also greasing the wheels of the rally by providing extra liquidity for banks. The U.S. central bank’s efforts to restore calm to financial markets in the aftermath of a sudden spike in short-term borrowing costs in mid-September has proven to be successful, said New York Fed President John Williams on Wednesday.
Investors so far remain largely unfazed by impeachment proceedings against President Donald Trump led by House Democrats. The House is widely expected to vote in favor of two articles of impeachment against the president late Wednesday, setting the stage for a trial in the Republican-controlled Senate, which is viewed as likely to acquit Trump.
Read: Here’s what’s happening next in Democrats’ effort to impeach President Trump
Check out: Why stock investors are keeping calm about impeachment — and what it would take for that to change
“Chalk up one more reason why U.S. equity markets have the wind in their sails just now,” said Nicholas Colas, co-founder of DataTrek Research. “The odds of a distracting political contretemps in 2020 are diminishing. The 2020 Presidential race, at least by current measures, is shaping up to be more about personalities (Trump vs. Biden) than a vote on U.S. economic norms. That said, there’s plenty of time for things to change. But that’s where things are today.”
Which companies are in focus?
FedEx Corp. FDX, -10.03% shares slumped 10% after it reported fiscal second-quarter earnings and an outlook that fell short of Wall Street forecasts. The stock took a beating Tuesday after the Wall Street Journal reported that Amazon.com Inc AMZN, -0.37% had blocked third-party vendors from using FedEx Ground shipping for Prime Deliveries.
Shares of General Mills Inc. GIS, +1.94% were up 2.0% after the consumer foods company reported a fiscal second-quarter profit that topped expectations, though revenue came up a bit short of forecasts.
Shares of Nio NIO, +1.54% were slightly higher after a 15% run-up over the past few days.
Boeing BA, +1.13% remains on watch after its decision to halt production of its 737 Max jets on Monday fanned concerns about the U.S. economy, although the stock itself stabilized. Boeing’s shares were up 1.1%.
The boards of Peugeot maker PSA Group PUGOY, +1.56% and rival Fiat Chrysler Automobiles FCAU, -0.91% late Tuesday backed a binding merger agreement that includes sweeteners to make the trans-Atlantic tie-up more attractive to U.S. regulators. Shares of PSA were up 1.3%, and Fiat Chrysler was down 0.7%.
Results are due after the closing bell from chip maker Micron Technology Inc. MU, +0.08% , which edged higher Tuesday to a more-than-one-year high on signs of improvement for the industry.
What are other markets doing?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +1.95% rose 3 basis points to 1.93%.
The price of crude oil ticked lower, with January futures for West Texas Intermediate crude CL00, -0.03% down a single cent to settle at $60.93 a barrel on the New York Mercantile Exchange.
The price of an ounce of gold for February delivery GCZ19, -0.07% fell $1.90, or 0.1%, to settle at $1,478.70.
The U.S. dollar DXY, +0.19% rose 16 cents, 0.2%, against a basket of its major peers.
In Europe, the STOXX Europe 600 SXXP, -0.13% was down 0.1% to 414.38. The U.K. FTSE 100 UKX, +0.21% was about 15 points, 0.2%, higher.
In Asia overnight, the China CSI 300 000300, -0.22% was little changed at 4,032, Hong Kong’s Hang Seng Index gained 40.50 points, 0.2%, and Japan’s Nikkei NIK, -0.55% tumbled 131.69 points, 0.6%.
Related: Here’s what may drive stocks even higher (hint: not the trade war or the Fed)
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