Wall Street's major benchmarks have retreated from their session highs but continue to trade with sizable gains after President Donald Trump softened his stance on Chinese investments in U.S. technology firms. Led by gains in industrials and energy shares, the Dow Jones Industrial Average is more than 100 points higher at midday, maintaining support at its 200-day moving average.
Futures raced higher and erased most of their overnight losses when the White House toned down its threats to invoke the International Emergency Economic Powers Act to prevent companies with 25% Chinese ownership from investing in U.S. high-tech firms. Instead, Trump is opting to use a less confrontational method to crack down on foreign investment via the Committee on Foreign Investment in the U.S. (CFIUS), an inter-agency committee tasked with reviewing the security implications of foreign investments in U.S. companies.
Stocks were also getting a boost from a rally in the energy complex on the heels of Department of Energy inventory data. A significantly larger-than-expected drop in inventories drove West Texas intermediate ( WTI ) to its highest level in nearly four years and the energy sector of the S&P 500 higher by 2%.
Recent developments tied to U.S./China trade coupled with a surge in oil futures overshadowed weaker-than-expected data on durable goods orders and pending home sales. Orders for products made to last for more than three years were down 0.6% in May, the first consecutive monthly decline in two years. Excluding transportation orders, durable goods orders were down 0.3% versus the expectation for a 0.5% increase.
Additionally, pending home sales were down 0.5%, missing the estimated 0.6% gain as shrinking inventory stifles market activity. As a result, homebuilder stocks are down with PulteGroup ( PHM ), DR Horton ( DHI ) and Toll Brothers ( TOL ) all down almost 1%.
Wednesday's other data included a narrower-than-expected trade deficit in goods of $64.85 billion.
European bourses followed the lead of their U.S. counterparts and moved higher in the wake of this morning's announcement on U.S. trade policy. The move higher in the Euro-Stoxx and FTSE-100 was amplified by a softer euro and pound as well as gains in European industrials including BASF, Siemens and Thyssenkrupp.
Crude oil was up 3.26% to $14.73 per barrel. Natural gas was up 0.63% to $23.98 per 1 million BTU. Gold was down $4.20 to $1,255.80 an ounce, while silver was down $0.10 to $16.23 an ounce. Copper was down $0.008 to $3.00 per pound.
Among energy ETFs, the United States Oil Fund was up 3.26% to $14.73 with the United States Natural Gas Fund was up 0.63% to $23.98. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 0.36% to 21.87 while SPDR Gold Shares were down 0.36% to $118.83. The iShares Silver Trust was down 0.72% to $15.22.
Here's where the markets stand at mid-day:
NYSE Composite Index was up 35.16 points (+0.29%) to 12,546.82
Dow Jones Industrial Index was up 181.40 points (+0.75%) to 24,464.51
S&P 500 was up 12.91 points (+0.48%) to 2,736.29
Nasdaq Composite Index was up 10.68 points (+0.14%) to 7,572.52
FTSE 100 was up 83.77 points (+1.11%) to 7,621.69
DAX was up 114.27 points (+0.93%) to 12,348.61
CAC 40 was up 45.91 points (+0.87%) to 5,327.20
Nikkei 225 was down 70.23 points (-0.31%) to 22,271.77
Hang Seng Index was down 525.14 points (-1.82%) to 28,356.26
Shanghai China Composite Index was down 31.64 points (-1.11%) to 2,812.87
NYSE SECTOR INDICES
NYSE Energy Sector Index was up 205.46 points (+1.73%) to 12,098.49
NYSE Financial Sector Index was up 7.82 points (+0.10%) to 7,820.23
NYSE Healthcare Sector Index was up 5.61 points (+0.04%) to 14,517.06
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