U.S. stocks were mostly higher on Tuesday despite persisting uncertainty regarding the U.S.-China partial trade deal. Moreover, investors’ are waiting for Fed Chair Jerome Powell’s congressional testimony on Nov 13. Both the S&P 500 and the Nasdaq Composite ended in the green while the Dow remained flat.
The Dow Jones Industrial Average (DJI) remained flat to close at 27,691.49. The S&P 500 increased 0.2% to close at 3,091.84. Meanwhile, the Nasdaq Composite Index closed at 8,486.09, gaining 0.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 0.1% to close at 12.68. A total of 6.6 billion shares were traded Monday, lower than the last 20-session average of 6.8 billion. Decliners outnumbered advancers on the NYSE by a 1.04-to-1 ratio. On Nasdaq, the ratio was nearly even.
How Did The Benchmarks Perform?
The Dow remained same at previous day’s level, marking the blue-chip index’sfirst completely flat close since Apr, 24, 2014. The S&P 500 closed in the green. The Real Estate Select Sector SPDR (XLRE) lost 0.7% while the Health Care Select Sector SPDR (XLV) gained 0.6%. The tech-laden Nasdaq Composite finished in the positive territory due to performance of large-cap tech stocks.
Both the S&P 500 and the Nasdaq Composite benefitted from Facebook Inc. (FB - Free Report) that rallied 2.6% r announcing a new payments tool that can be used through its applications. Facebook carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Uncertainty Regarding Partial Trade Deal
On Nov 12, President Donald Trump delivered a speech at the Economic Club of New York, where he said a U.S.-China trade deal “could happen soon,” and added that a phase one agreement is “close.” The partial trade deal was scheduled to be signed by both sides in mid-November. However, it has already been postponed to next month.
At the same time, he threatened more tariff hikes on Chinese imports if the trade negotiation fails to produce an interim agreement. Trump has categorically mentioned that he would only accept the interim trade deal if the agreement worked to the advantage of U.S. workers and businesses.
In a strong statement, he said “since China’s entrance into the World Trade Organization in 2001, no one has manipulated better or taken advantage of the United States more.” “I will not say the word ‘cheated,’ but nobody’s cheated better than China, I will say that.”
On Nov 8, President Donald Trump told reports that he hasn’t agreed so far to roll back the existing tariffs in phases that his administration imposed on Chinese goods over the past one and half years. Moreover, senior U.S. Trade Advisor Peter Navarro said that no formal agreement has taken place between the United States and China to remove tariffs on each other goods.
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