US indexes finished higher for the session with the exception of the Nasdaq that fell 0.23% following weakness in the semiconductors and the major tech and social media stocks. The Dow and S&P 500 rallied early in the session as news came out that the US was in the process of proposing a new round of trade talks with China. By mid afternoon the Dow had pared most of its gains whilst the S&P 500 closed marginally below the session high. See charts below –source Finviz.
Stocks profiting from the news included Boeing shares rising 2.39% and Caterpillar shares rising 2.36%, whilst Walgreen Boots Alliance outperformed, as the stock was the best performer on the Dow rising 2.39%. For those stocks that didn’t quite profit from the news, things looked sour as the VanEck Semiconductors exchange traded fund (SMH) fell 1.2% weighed down by a fall in Micro Technology dropping 4.27%, Lam Research falling 3.24% and Applied Materials down 2%. The declines were in response to a Goldman Sachs downgrade for Micron from a neutral to a buy, citing “snowballing decline in memory chip demand”.
In the world of tech it was all about Apple shares as the company revealed a new wave of products including three new iPhones (XS, XS Max and XR) along with a new health oriented watch. Shares of Apple fell 1.2% along with fitness rival Fitbit down 6.9%, as the global tech company entered the health fitness industry.
In currency markets, the dollar fell following the reports of trade talks jumpstarting between the US and China. The dollar index was down 0.49 percent at 94.787. Rises in the euro and sterling also put the US dollar under pressure after pro-Brexit lawmakers in Theresa May’s party publicly pledged support for her despite disagreeing with her Brexit proposals. Sterling was up 0.18 percent at $1.3056 and the euro was up 0.26 percent at $1.16350.
Investors should also note that the European Central Bank and the Bank of England meet tonight to determine the level of interest rates.
Chart of the Day: Walgreen Boots Alliance (WBA) Daily chart