NEW YORK: The S&P 500 flitted between positive and negative territory yesterday afternoon but was well above its session low after testimonies to US Congress from trade and central bank officials as well as President Donald Trump’s former lawyer brought few surprises.
US trade representative Robert Lighthizer told a congressional hearing the United States and China still had hard work ahead to settle their trade dispute in his first public comments since Trump announced a delay to Chinese import tariffs on Sunday.
Federal Reserve Chair Jerome Powell told Congress the central bank would stop shrinking its $4 trillion balance sheet this year, ending a process investors say is at cross-purposes with its current pause on interest rate hikes.
The S&P drifted gradually higher after hitting a session low around 10.30am and swerved in and out of positive territory in afternoon trading.
“The two things that have been market drivers have been central bank policy and trade negotiations. Two of the most important guys in those areas testified today. When they said reasonable and measured things, (stocks) recovered,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
Also yesterday, Trump’s former lawyer Michael Cohen called the president a “conman” but said he had no direct evidence Trump colluded with Moscow to bolster his White House campaign ahead of the 2016 election.
“Most people were expecting some kind of bombshell out of Cohen’s testimony. The naysayers didn’t get what they wanted so the market recovered,” said Brian Belski, chief investment strategist at BMO Capital Markets in New York.
Belski also saw India-Pakistan tensions as a support for US assets as investors sought safer alternatives to emerging markets.
At 3.09pm, the Dow Jones Industrial Average fell 52.09 points, or 0.2%, to 26,005.89, the S&P 500 lost 0.27 points, or 0.01 percent, to 2,793.63 and the Nasdaq Composite added 6.87 points, or 0.09 percent, to 7,556.17.
Optimism on trade and Fed policy have boosted equities from December lows in recent weeks, with the S&P 500 index roughly 5 per cent below its record closing high hit in late September.
Of the 11 major S&P sectors, six were trading lower with the healthcare index weighing the most. Shares of health insurers and pharmacy benefit managers slipped after pharma executive comments on Tuesday at a Senate hearing and the introduction of a bill aimed at moving all Americans into a government health insurance programme.
Also dragging on the sector was a 14.5 per cent drop in shares of Mylan NV after the generic drugmaker missed quarterly profit estimates and forecast weak 2019 earnings.
However, losses on the S&P 500 were limited as a rise in oil prices boosted the energy sector, which rose 0.8 per cent.
Best Buy Co Inc jumped 15.7 per cent after the consumer electronics retailer beat analysts’ estimates for quarterly same-store sales, while announcing a hike in dividend and a plan to buy back shares
Declining issues outnumbered advancing ones on the NYSE by a 1.05-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favoured advancers.
The S&P 500 posted 22 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 54 new highs and 27 new lows. — Reuters