US stocks inch higher as Wall Street shrugs off trade war fears – CNBC

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U.S. stocks were little changed Wednesday after posting their worst session in nearly two weeks during the previous session as investors shrugged off fears of a global trade war.

The Dow Jones industrial average traded 50 points higher after opening up more than 100 points; gains in UnitedHealth and 3M contributed the most to the blue-chip index. The S&P 500 climbed 0.25 percent amid strong performance in utilities and energy companies.

The SPDR Utilities Select Sector SPDR fund climbed more than 1 percent, on pace for its fifth straight positive day for the first time since Nov. 30 and a 5-day win streak.

The Nasdaq composite added 0.1 percent as Amazon and Microsoft traded higher.

The moves come after a choppy trading day Tuesday, with the Dow Jones industrial average closing down more than 150 points, the index’s worst session since March 1.

“Certainly the stock market is being supported by the economy and earnings being in double digits this year,” said Bruce Bittles, chief investment strategist at Baird. “I’d say the one problem area is the technical situation and that the rally is getting more narrow … That would suggest we may have another retest of the February lows before this is all over.”

But as for political news on trade and a possible trade war, Bittles said that those worries are likely “overstated.”

Last week, President Donald Trump signed two declarations to impose tariffs on steel and aluminum imports — both are expected to take effect in the coming weeks. While Canada and Mexico are exempt from the deal, fears over a potential trade war remain, as investors worry that countries around the world may impose their own retaliatory tariffs.

A source told CNBC on Tuesday that Washington is contemplating a trade package that would include investment restrictions, indefinite tariffs and potentially even visa restrictions on Chinese travelers.

Asian equities were down, with the Nikkei 225 falling 0.87 percent and the Shanghai composite dropping 0.57 percent. In Europe, the Stoxx Europe 600 rose 0.5 percent as corporate news helped lift the major indexes.

German apparel company Adidas climbed more than 12 percent after it revised upward its long-term profit target and said it would propose a higher dividend.

Investors will also be reflecting on Trump’s decision to fire Secretary of State Rex Tillerson, followed by the announcement that he would nominate CIA Director Mike Pompeo as Tillerson’s replacement.

Ford Motor Company’s stock rallied more than 4 percent after Morgan Stanley upgraded the company to overweight from underweight. The bank sees more potential in the American motor vehicle company following “significant changes” to senior management at the company and its efforts to improve its global portfolio.

Shares of Qualcomm fell more than 1.5 percent after Broadcom announced that it is formally ending its hostile bid for the American chipmaker. Qualcomm stock fell nearly 5 percent Tuesday after President Trump ordered Broadcom to abandon the deal.

Yields on 10-year Treasurys fell to 2.837 percent Wednesday in New York, their lowest level since early March. Yields move inversely to prices.

In economic data, U.S. producer prices increased slightly more than expected in February. The Department of Labor said on Wednesday that its producer price index rose 0.2 percent last month; economists polled by Reuters had expected PPI gaining 0.1 percent.

So-called core PPI — which excludes volatile food, energy and trade service prices — rose 0.4 percent.

The Commerce Department said retail sales declined for a third straight month on Wednesday as households curbed purchases of cars and other expensive items. Economists had been expecting sales to rise 0.3 percent.

CNBC’s Gina Francolla contributed to this report.