US stocks closed mostly lower on Wednesday, 26 June 2019 as investors grew increasingly skeptical that a U.S.- China trade deal is in the offing, though technology shares were supported by optimism related to Micron Technology's better-than expected guidance.
The Dow Jones Industrial Average fell 11.4 points, or less than 0.1%, to 26,536.82, while the S&P 500 fell 3.6 points, or 0.1%, to 2,913.78, representing a fourth straight decline for the index. The Nasdaq Composite Index rose 25.2 points, or about 0.3%, to 7,909.97, halting a three-session stumble.
The broader market finished little changed, but there were some big moves in the S&P 500 sectors. The defensive-oriented utilities, real estate, consumer staples and health care sectors declined noticeably.
Higher oil prices fueled broad-based buying in the energy space after the EIA released some bullish inventory data. The tech sector derived its strength from shares of Apple and many of the semiconductor stocks, which outperformed after Micron pleased investors with solid quarterly results and better-than-feared guidance.
In other earnings news, investors were able to overlook downside earnings guidance from FedEx suggesting that much of the bad news may have already been priced-in to the stock's recent underperformance. FedEx also beat earnings estimates. General Mills on the other hand, disappointed investors with a revenue miss.
U.S. economic data published Wednesday was again weak, with durable-goods orders for May dropping 1.3%, weighed down by Boeing woes from its grounded 737 MAX jets. A separate report on international trade in goods also showed the U.S. trade deficit climbed 5.1% for the same month, which was wider than expected.
U.S. Treasuries finished on a lower note, driving yields higher across the curve. The 2-yr yield increased four basis points to 1.78%, and the 10-yr yield increased six basis points to 2.05%. The U.S. Dollar Index increased 0.1% to 96.22.
U.S. oil prices climbed by nearly 3% on Wednesday, 26 June 2019 as the U.S. government reported a weekly drop of nearly 13 million barrels in domestic crude stocks. Gasoline futures also rallied on news of the planned closure of a key East Coast refinery. Prices for both U.S. oil and gasoline settled at their highest in five weeks.
August West Texas Intermediate crude rose $1.55, or 2.7%, to settle at $59.38 a barrel on the New York Mercantile Exchange after tapping a high at $59.93. International benchmark August Brent crude gained $1.44, or 2.2%, to $66.49 a barrel on ICE Futures Europe—the highest settlement in about a month.
The Energy Information Administration on Wednesday reported that U.S. crude supplies dropped by 12.8 million barrels for the week ended June 21. Market had expected a decline of 2.8 million barrels in crude stocks, on average. The EIA data also showed that gasoline inventories were down by 1 million barrels, while distillate stockpiles fell 2.4 million barrels last week. Market had shown expectations for supply declines of 1.1 million barrels each for gasoline and distillates.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the third estimate for first quarter GDP, and Pending Home Sales for May on Thursday.