Wall Street closed slightly higher on Tuesday as energy shares rebounded from steep losses in the previous session, but mixed messages from the Trump administration regarding trade kept a lid on gains.
The Dow Jones Industrial Average rose 30.31 points to close at 24,283.11, with Apple and Chevron rising 1.2 percent each. The S&P 500 gained 0.2 percent and ended at 2,723.06, as energy rose more than 1 percent. The Nasdaq composite advanced 0.4 percent to 7,561.63 as Netflix rose 3.9 percent, after sliding 6.5 percent on Monday.
General Electric rose sharply on its first day after being booted from the Dow and posted its biggest one-day gain in three years.
“A lot of investors are taking a wait-and-see approach with the confusion around trade policy,” said Ryan Nauman, market strategist at Informa Financial Intelligence. But on the other hand, “the fundamentals have been phenomenal. I think all this trade talk is sort of dampening the excitement around the fundamentals.”
Treasury Secretary Steven Mnuchin said in a tweet Monday that a report from the Wall Street Journal about the Trump administration planning to curb Chinese investment in U.S. tech was “fake news.” Mnuchin added, however, that those restrictions will apply to “all countries that are trying to steal our technology.”
Later on Monday, Peter Navarro, a trade advisor to President Donald Trump, told CNBC said there were no plans on slapping investment restrictions on China or other countries. He also said the stock market was overreacting to such fears.
However, White House press secretary Sarah Sanders doubled down on Mnuchin’s statement, saying in a press briefing: “As the Secretary said, a statement would go out that targets all countries that are trying to steal our technology, and we expect that to be out soon.”
Stocks fell sharply on Monday, with the Dow dropping more than 300 points and the S&P 500 sliding 1.4 percent, its biggest one-day decline since April 6. Tech shares fell 2.3 percent, its worst day since April 6.
“There’s a lot of uncertainty out there,” said Maris Ogg, president at Tower Bridge Advisors. “What this trade stuff is doing is making companies put their money back in their pockets. Nobody wants to take a chance and invest in capex.”
“They (the Trump administration) are looking at some of the past measures and saying they don’t work anymore,” said Ogg. “I don’t know if Trump has the capability to sort this out. … Fortunately for us, the market is not richly valued at this moment.”
Harley-Davidson declined almost 6 percent on Monday after announcing it will shift production of motorcycles headed for Europe to factories outside the U.S. Trump went after the motorcycle maker on Tuesday, saying in a tweet “they will be taxed like never before.” The stock fell 0.6 percent.
General Electric shares jumped 7.8 percent after the company revealed a plan to spin off its health-care business and sell its stake in Baker Hughes. The company also announced it will maintain its current dividend until the spin-off is complete.
Energy stocks jumped 1.4 percent after the State Department ordered companies who import Iranian oil to reduce them to zero by November. The order sent West Texas Intermediate futures higher by 3.6 percent to $70.53 per barrel.
Source: CNBC
