Mixed finish for US stocks

Dow Jones Industrial Average posted its seventh consecutive daily decline

U.S. stock-market indices closed mostly higher on Wednesday, 20 June 2018 though the Dow Jones Industrial Average posted its seventh consecutive daily decline, its longest losing streak since March 2017. Recent trade has been driven by uncertainty surrounding trade policy, which has colored investor sentiment since March.

The Dow Jones Industrial Average closed 42.41 points, or 0.2%, lower to 24,657.80, recording its seventh straight daily loss. The S&P 500 index added 4.73 points, or 0.2%, to 2,767.32, with seven of its 11 main sectors closing in positive territory. The Nasdaq Composite Index closed at a record, rising 55.93 points, or 0.7%, to 7,781.51. The Nasdaq gains were fuelled by a rally in biotechnology stocks.

Investors appeared tempted back into the market after Tuesday's selloff, triggered by the U.S. threat of tariffs on up to $450 billion more in Chinese products. The Trump administration dialed up the rhetoric late Tuesday, accusing China of waging a systematic campaign of economic aggression. Worries that rising trade tensions could develop into a major headwind for global growth going forward have hung over investors for months. Starbucks Corp. SBUX, -9.07% slumped 9.1% after saying it will close more coffee shops in an increasingly crowded U.S. market.

AMong stocks under focus, General Electric fell 0.5%. Dow Jones Indices announced Tuesday that it would remove GE from the Dow Jones Industrial Average, where it has been a component for more than a century. It will replace the conglomerate with Walgreens Boots Alliance. Shares of Walgreens rose 5.3%.

On Tuesday, markets experienced a bout of flight-to-safety trading after President Donald Trump asked U.S. Trade Representative Robert Lighthizer late Monday to identify $200 billion more in Chinese products that could be subject to tariffs of 10%, ratcheting up concerns that a trade war may erupt, roiling global economies.

The dollar, as gauged by the ICE U.S. Dollar Index, a measure of the buck against a half-dozen currencies, was down 0.1% Wednesday, but has advanced nearly 1.1% in June. The 10-year Treasury note yield edged up by 2.3 basis points to 2.915%.

Moreover, the Federal Reserve's plan to raise interest rates twice more in 2018, after lifting benchmark rates by a quarter of a percentage point last week, have helped to underpin some upward momentum in the U.S. dollar and has driven interest rates on benchmark 10-year Treasury note higher.

Reviewing Wednesday's economic data, which included the Existing Home Sales report for May, the Current Account Balance for the first quarter, and the weekly MBA Mortgage Applications Index. Existing home sales decreased 0.4% in May to an annualized rate of 5.43 million units (consensus 5.55 million). The April reading was revised to 5.45 million (from 5.46 million).

Separately, the current account deficit for the first quarter totaled $124.1 billion (consensus -$129.2 billion). The fourth quarter deficit was revised to $116.1 billion from $128.2 billion. The weekly MBA Mortgage Applications Index rose 5.1% to follow last week's decline of 1.5%.

Bullion prices ended lower at Comex on Wednesday, 20 June 2018. Gold futures settled lower on Wednesday and marked a fresh nadir for 2018 as overall strength in dollar eroded appetite for the precious yellow metal. August gold retreated by $4.10, or 0.3%, to settle at $1,274.50 an ounce. That was the lowest settlement for a most-active contract since 21 Dec 2017. July silver shed less than 0.1% to $16.309 an ounce, for its lowest settlement since mid-May.

Prices for U.S. benchmark oil futures settled with a gain Wednesday, 20 June 2018 at Nymex, at a nearly one-week high, after U.S. government data revealed the biggest weekly decline in U.S. crude supplies since January. Global benchmark Brent crude prices, however, finished lower as traders monitored comments from major oil producers gathering for the much-anticipated Organization of the Petroleum Exporting Countries meeting at the end of the week.

July West Texas Intermediate crude which expired at the end of the trading session, added $1.15, or 1.8%, to settle at $66.22 a barrel on the New York Mercantile Exchange. August WTI crude which is now the front-month contract, tacked on 81 cents, or nearly 1.3%, to $65.71. August Brent oil, the international benchmarklost 34 cents, or nearly 0.5%, to finish at $74.74 a barrel on ICE Futures Europe.

The U.S. Energy Information Administration reported Wednesday that crude supplies dropped by 5.9 million barrels for the week ended 15 June. Market had forecast a fall of 3.7 million barrels. Gasoline stockpiles rose by 3.3 million barrels for the week, while distillate stockpiles climbed by 2.7 million barrels. Market had forecast a supply fall of 1 million barrels for gasoline, and expected distillate stocks to be down by 700,000 barrels.

On Thursday, investors will receive the weekly Initial Claims report (consensus 220K), the Philadelphia Fed Index for June (consensus 27.0), the FHFA Housing Price Index for April, and the Conference Board's Leading Economic Index for May (consensus +0.4%).

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