US Stock Indexes Close Mixed 06/24 16:16
The U.S. stock market capped a day of listless trading with modest losses
Monday as investors focused on upcoming trade talks between the U.S. and China.
(AP) -- The U.S. stock market capped a day of listless trading with modest
losses Monday as investors focused on upcoming trade talks between the U.S. and
The major stock indexes drifted between small gains and losses for much of
the day, though smaller company stocks had their worst day since May. The
losses erased some of the market's solid gains from last week, when the
benchmark S&P 500 index closed at an all-time high.
The muted trading came as investors looked ahead to a highly anticipated
meeting between the leadership of the U.S. and China later this week. The
world's two largest economies have been embroiled in a trade war that has taken
the market on a volatile roller-coaster ride this year and Wall Street is
hoping for a deal.
"The market right now seems to be pricing in some combination of at least a
de-escalation between the U.S. and China from a trade standpoint to the point
where it doesn't drive us into a recession," said Michael Crook, head of
Americas investment strategy at UBS Global Wealth Management.
The S&P 500 index slipped 5.11 points, or 0.2%, to 2,945.35. The index is
about 0.3% below the record high it set on Thursday.
The Dow Jones Industrial Average rose 8.41 points, or less than 0.1%, to
26,727.54. The Nasdaq composite dropped 26.01 points, or 0.3%, to 8,005.70. The
Russell 2000 index of smaller companies slid 19.54 points, or 1.3%, to
1,530.08, its biggest single-day loss since May 31.
Major indexes in Europe finished mostly lower.
The market notched its third straight weekly gain last week and is on track
for a strong monthly rebound from a steep sell-off in May. The major U.S. stock
indexes are up more than 7% so far this month and are holding on to gains of
more than 14% for the year.
Investors have been reassured by statements from the Federal Reserve this
month that suggest the central bank is prepared to cut interest rates in
response to a slowing global economy. Even so, traders remain concerned that
corporate profits might suffer should the kind of economic slowdown that would
prompt the Fed to cut rates take hold.
Trade policy remains the biggest source of uncertainty looming over the
market. Worries about the dispute and its potential impact on global economic
growth sent the broader market on a bumpy ride during the second quarter as the
Presidents Donald Trump and Xi Jinping plan to meet at the Group of 20
summit in Japan, which starts Friday. Wall Street is once again hoping that the
two sides can find a path to making a deal that will end their trade war.
The two sides are in a stalemate after 11 rounds of talks that have failed
to overcome U.S. concerns over China's acquisition of American technology and
its massive trade surplus. China denies forcing U.S. companies to hand over
trade secrets and says the surplus is much smaller than it appears.
Health care stocks accounted for a big share of the selling Monday, led by a
slide in shares of pharmaceutical giant Bristol-Myers Squibb.
The stock fell after the company said it would divest its blockbuster
psoriasis treatment Otezla as part of a push to win regulatory approval for its
$74 billion buyout of Celgene. Shares in Bristol-Myers were the biggest
decliner in the S&P 500, losing 7.4%. Celgene dropped 5.4%.
Consumer discretionary stocks and banks also helped pull the market lower.
Ulta Beauty dropped 2.6% and Capital One Financial dropped 3.1%.
Energy stocks also declined. The sector remains volatile as oil prices
fluctuate over concerns about economic growth and rising tensions in the Middle
East. Concho Resources fell 3.4%.
Technology companies, consumer goods makers and materials stocks were among
the gainers. Western Digital rose 2.5%, Tyson Foods added 1.9% and Newmont
Goldcorp gained 2.5%.
Bond prices rose, sending yields lower, as investors continued to shift
money into U.S. bonds as a hedge against a possible downturn in the economy or
further escalation in trade tensions. The yield on the 10-year Treasury note
fell to 2.02% from 2.06% late Friday.
"The pricing in the bond market right now does indicate that it wouldn't
take much to create a recession if we had some bad policy mistake either from
the Fed or from a trade standpoint," Crook said.
Traders welcomed news that Eldorado Resorts has agreed to buy casino
operator Caesars Entertainment in a cash-and-stock deal valued at $17.3 billion.
The deal creates a casino giant with about 60 casinos and resorts in 16
states under a single name. Caesars has been struggling since emerging from
bankruptcy in 2017. Billionaire investor Carl Icahn took an enormous stake in
the company and pushed for big changes. Caesars surged 14.5% and Eldorado fell
Energy futures finished mixed. Benchmark crude oil rose 47 cents to settle
at $57.90 a barrel. Brent crude oil, the international standard, fell 34 cents
to close at $64.86 a barrel. Wholesale gasoline fell 1 cent to $1.85 per
gallon. Heating oil declined 1 cent to $1.91 per gallon. Natural gas rose 12
cents to $2.30 per 1,000 cubic feet.
Gold rose $18.20 to $1,414.30 per ounce, silver rose 10 cents to $15.37 per
ounce and copper was unchanged at $2.71 per pound.
The dollar fell to 107.32 Japanese yen from 107.41 yen on Friday. The euro
strengthened to $1.1401 from $1.369.