Stocks were higher across all of the major indices Wednesday on renewed trade optimism. However, Wednesday afternoon, Reuters reported that China lowered its expectation for significant trade deal progress this week. This new sentiment China’s surprise and anger on the heels of a decision by the U.S. to add 28 Chinese organizations to its blacklist Monday evening for alleged human rights violations in China’s Xinjiang region. The Trump administration also implemented travel bans on Chinese officials tied to the alleged human rights abuses Tuesday afternoon.
Here were how the markets ended Wednesday’s trading session:
S&P 500 (^GSPC): +0.91%, or 26.35 points
Dow (^DJI): +0.70%, or 181.97 points
Nasdaq (^IXIC): +1.02%, or 79.96 points
Crude oil (CL=F): +0.08% to $52.67 per barrel
Gold (GC=F): +0.52% to $1,511.70 per ounce
While China isn’t optimistic about reaching a broad trade deal at this time, it is at least looking to reach a partial trade deal with the U.S., according to Bloomberg. One official with direct knowledge of the negotiations said that China would be open to a partial deal as long as no additional tariffs are slapped onto Chinese goods. The official also said that China would be willing to make non-core concessions such as purchasing agricultural products but would refrain from conceding on major sticking points.
Top negotiators from the U.S. and China are gearing up to kick off trade talks in Washington starting Thursday. If no material progress is made, U.S. tariffs on about $250 billion of Chinese goods will increase to 30% from 25% on October 15.
At 2 p.m. ET, the Fed released the minutes of its September Federal Open Market Committee (FOMC) meeting, which ended with the committee cutting bringing down its target federal funds rate to a range of 1.75% to 2.00%.
“Participants generally judged that downside risks to the outlook for economic activity had increased somewhat since their July meeting, particularly those stemming from trade policy uncertainty and conditions abroad,” the minutes read. “In addition, although readings on the labor market and the overall economy continued to be strong, a clearer picture of protracted weakness in investment spending, manufacturing production, and exports had emerged.”
Among other things, committee members debated how to communicate when the Fed would stop loosening monetary policy.
“Several participants suggested that the Committee's postmeeting statement should provide more clarity about when the recalibration of the level of the policy rate in response to trade uncertainty would likely come to an end.”
STOCKS: Johnson & Johnson hit with $8 billion jury award; Levi’s earnings beat; PG&E to cut power for 800,000 California customers
Johnson & Johnson (JNJ) shares fell Wednesday after a jury in Philadelphia ordered the company to pay $8 billion in damages to a man who claimed that his use of Johnson & Johnson’s anti-psychotic drug Risperdal as a child made him grow unwanted breasts. The condition is called gynecomastia and causes enlargement of breast tissue. Risperidal was approved by the U.S. Food and Drug Administration in 1993 to treat schizophrenia and bipolar disorder in adults. The plantiffs argued that J&J was aware of the negative side effect but underplayed the seriousness to doctors.
Levi Strauss (LEVI) reported a beat on both the top and bottom lines for its third quarter. The retailer reported adjusted earnings of 31 cents per share on $1.45 billion in revenue. However, North America revenue fell 3% compared to the same time period last year due to a decline in its wholesale business. Levi’s push to strengthen its direct-to-consumer (DTC) business is paying off. The company reported that its DTC business rose 9%. For the fourth quarter, Levi’s expects strong performance in its international, DTC, women’s and tops businesses.
More trouble for embattled power provider PG&E (PCG). Shares were taking another hit Wednesday after the company kicked off its shutoff strategy for homes in Northern California. The company will be shutting off electricity in a two-phase process starting Wednesday evening and will eventually affect 800,000 homes in the Bay Area. The move is the biggest planned blackout to date and is an attempt to ensure that PG&E’s power lines do not spark any more wildfires. PG&E was forced to file for bankruptcy after numerous devastating fires ravaged California for years. Nevertheless, PG&E’s decision to cut off power to hundreds of thousands of homes is a move that the company said is “unprecedented.”
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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