Wall Street cancels losses after commercial statements by White House advisor


Traders work on the floor of the NYSE in New York
Traders are working on the floor on the New York Stock Exchange (NYSE) in New York, United States on November 26, 2018. REUTERS / Brendan McDermid

November 27, 2018

By Stephen Culp

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

The three major Wall Street indexes reversed losses after Kudlow's comments a few days before the big-ticket dinner between Trump and Xi Jinping after the G20 summit in Buenos Aires.

But Kudlow also said the White House had been disappointed so far by China's reaction to trade problems with the United States. On Monday, Trump threatened to go ahead with additional tariffs on Chinese products, which are expected to come into effect on Jan. 1.

"The volatility we are seeing this afternoon is related to Kudlow's comments," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "In all sectors, the market is in free fall and very unstable. And it is mainly the question of tariffs that overhangs the market. "

General Motors Co Shares fell 2.5% after Trump warned that subsidies could be reduced after the automaker announced that it would close factories in the United States and lay off thousands of workers.

"GM's thing is a war of words," said Ghriskey. "Here is a company that tries to react to the market environment … and is being criticized for it."

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

Of the 11 main sectors of the S & P 500, all but three ended the session in positive territory. Health care <.SPXHC> recorded the largest percentage gain with an increase of 0.99%, followed by gains in defensive sectors such as staple <.SPLRCS>, utilities <.SPLRCU> and real estate <.SPLRCR>.

Trade-sensitive industry <.SPLRCI> and materials <.SPLRCM> sectors were down, as was the energy <.SPNY>.

Shares of US steel companies fell as China's steel sector retreated to bearish territory, the benchmark rebar contract down more than 20% from its peak of 2018. US Steel Corp slipped 8.3%, while AK Steel Holdings decreased by 4.6%.

Cheap airline Spirit Airlines Inc took off, its stock rose 15.3% after raising Q4 unit earnings forecasts.

Shares of the drug manufacturer Bristol-Myers Squibb Co fell after his treatment for lung cancer failed to meet his goals in a final-phase trial. Its shares closed down 3.0%.

United Technologies Corp fell 4.1% after announcing Monday night that it would divide its aerospace, elevator and building sectors into three separate companies.

Federal Reserve Chairman Jerome Powell is expected to speak on Wednesday, and investors will look closely at his comments on the economic health and trade concerns of the United States.

Falling issues outnumbered NYSE rising issues by 1.57 to 1; on the Nasdaq, a ratio of 1.94 / 1 favored the decline.

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

The volume of US trade amounted to 6.79 billion shares, compared to an average of 7.90 billion shares over the last 20 trading days.

(Stephen Culp's report, edited by Jonathan Oatis)


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