U.S. Stocks Post Modest Gains
The main U.S. stock market benchmarks gained on Tuesday as it tried to recover from Monday’s losses. The Dow Jones Industrial Average advanced 30.31 points (+0.1%) but still closed below its 200-day moving average for the second straight session. The S&P 500 index added 5.99 points (+0.2%) while the Nasdaq Composite Index rose 29.62 points (+0.4%).
In the broader S&P 500, 6 of the 11 primary sectors finished the session in positive territory. The jump in oil prices to above $70 per barrel pushed the energy shares higher to lead gainers. The mood at Wall Street remains cautious because of the prevailing uncertainty over a looming trade war which triggered the previous day’s selloff.
But another selloff appears likely on Wednesday as the Dow futures dropped more than 100 points. This time, fears about a full-scale U.S-China trade war are worrying investors.
Chinese Stocks Enter Bear Territory
Global stocks slipped on Wednesday and are now approaching their two-month lows. Losers were led by the Shenzen-listed blue chip stocks which fell 2.2% which is just a shade above its 13-month lows. Their currency also weakened due to the mounting stress on the country’s economy.
Thus, with Chinese stocks tumbling 20% from recent weeks, they have entered the so-called bear market territory. The yuan slipped to a fresh six-month low against the dollar. The central bank allowed the biggest one-day weakening in the currency in terms of percentage since January 2017. Analysts are saying the authorities permitted the currency weakness to counter the hit to trade.
Baidu to Buyback $1 Billion Shares
Baidu Inc. (BIDU) announced on Wednesday that its board of directors approved the plan to buy back up to $1 billion of its shares. The search engine giant from China’s also disclosed that the repurchases will take place over the next 12 months.
The share repurchase program will be periodically reviewed by the board so the term and size are subject to adjustments. The funds to be used for the buyback will come from Baidu’s existing cash balance. BIDU have risen about 40% in the past year and is up 7.07% year-to-date.
G.E. Shares Post Biggest Gain in 3 Years
After announcing it will spin off its health care business and unload its stake in oil and gas company Baker Hughes (BHGE), the shares of General Electric Co. (GE) sizzled. GE jumped 7.76% on Tuesday to post its biggest gain in 3 years.
The good news for the cash-strapped U.S. conglomerate coincided with its ouster from the Dow Jones Industrial Average. GE no longer belongs to the elite 30-stock index.
General Mills Reports Drop in Quarterly Profit
General Mills Inc. (GIS) reported on Wednesday reported a 13% drop in quarterly profit. The Cheerios cereal maker cites higher input and freight costs as the reasons for the decline.
The net earnings attributable to the company fell from $408.9 million to $354.4 million in the fourth quarter ended May 27. Meanwhile, net sales climbed to $3.89 billion from $3.81 billion.