Stocks Higher as Trade Fears Ease 06/20 09:40
U.S. stocks are mostly higher Wednesday morning as global markets let go of
some of their fears about the growing trade dispute between the U.S. and China.
NEW YORK (AP) -- U.S. stocks are mostly higher Wednesday morning as global
markets let go of some of their fears about the growing trade dispute between
the U.S. and China. Technology companies and banks are making some of the
largest gains. Twenty-First Century Fox is jumping after it agreed to a new
deal with Disney, which will buy Fox's entertainment businesses for $71.3
billion. Walgreens rose after it was added to the Dow Jones industrial average,
where it will replace General Electric next week.
KEEPING SCORE: The S&P 500 index rose 5 points, or 0.2 percent, to 2,767 as
of 10:15 a.m. Eastern time. The Dow slipped 10 points to 24,690. The Nasdaq
composite gained 45 points, or 0.7 percent, to 7,771, which put it on track for
a record high. The Russell 2000 index of smaller-company stocks added 5 points,
or 0.3 percent, to 1,699 after it closed at another record high Tuesday.
The S&P fell as much as 1.1 percent early Tuesday as trade tensions between
the U.S. and China increased, but the benchmark index wound up with a loss of
just 11 points, or 0.4 percent. While President Donald Trump threatened to put
new tariffs on as much as $400 billion in imports from China and China
threatened to retaliate, investors felt that many industries don't face a major
threat from the proposals and that smaller, more U.S.-focused companies are
likely to keep doing well.
Both countries plan to put tariffs on about $50 billion in imports in early
July, which still leaves them with several weeks to negotiate.
SEQUEL: Twenty-First Century Fox jumped again after it accepted a new offer
from Disney that values Fox's entertainment and international businesses at
$71.3 billion in cash and stock. Fox accepted a $52.4 billion bid from Disney
in December before Comcast offered to buy those businesses for $65 billion. Fox
surged 6.2 percent to $47.48 while Disney added 0.9 percent to $107.01. Comcast
edged up 0.2 per cent to $32.86.
DOW AND OUT: General Electric is coming out of the Dow Jones industrial
average after more than a century and it will be replaced by Walgreens Boots
Alliance on Tuesday. GE was part of the Dow when the index was created 1896 and
it's the last component that remains an independent publicly traded company.
GE is by far the least expensive Dow stock in terms of share price, which is
how the Dow is weighted. Walgreens jumped 2.9 percent to $66.45 Wednesday while
GE added 0.1 percent to $12.96 after several days of losses.
For years GE has been struggling in critical markets and selling off
businesses. It's also given some weak forecasts and early this year said the
Securities and Exchange Commission was investigating the company over a $15
billion hit taken to cover miscalculations made within an insurance unit.
Adjusted for inflation, GE was worth around $860 billion in mid-2000, but it's
worth $112 billion now, including a drop of more than 50 percent over the last
BITTER TASTE: Starbucks said it will close more stores than usual next year
to try to boost its sales growth. It plans to close 150 locations and also said
it expects 1 percent sales growth in the third quarter. The stock dropped 6.7
percent to $53.58.
DIDN'T SEE IT COMING: Oracle lost 4.5 percent to $44.21. The software maker
had a solid fiscal fourth quarter, but investors were concerned about its sales
ENERGY: Oil futures ticked up ahead of Friday's OPEC meeting, where most
experts think the group will increase production. As a result of that view,
crude prices have dropped over the last few weeks. Benchmark U.S. crude rose
1.3 percent to $65.77 a barrel in New York. Brent crude, the international
standard for oil prices, rose 0.7 percent to $75.57 a barrel in London.
BONDS: Bond prices inched lower. The yield on the 10-year Treasury note rose
to 2.91 percent from 2.90 percent.
CURRENCIES: The dollar rose to 110.16 yen from 110.07 yen. The euro edged up
to $1.1578 from $1.1575.
OVERSEAS: The FTSE 100 in Britain jumped 0.8 percent and Germany's DAX was
up 0.1 percent. France's CAC 40 lost 0.1 percent. After sharp losses the day
before, Japan's benchmark Nikkei 225 index rebounded 1.2 percent and South
Korea's Kospi gained 1 percent. Hong Kong's Hang Seng rose 0.8 percent.