Big losses at Wall Street

Bank and tech shares lead the decline

U.S. stocks closed solidly lower on Wednesday, 27 June 2018 with the losses driven by a pronounced drop in large-cap technology and internet stocks. Sentiment was once again driven by uncertainty over trade policy, and while major indexes opened higher, they turned negative in midday trading, with selling accelerating throughout the session and major indexes closing at their lowest levels of the month.

The Dow ended the session off 165.52 points, or 0.7%, at 24,117.59, after the blue-chip gauge touched an intraday high up 285.91 points. The S&P 500 index, also marked its largest blown lead since February, after it peaked up 0.85%, but finished the session down 0.9% at 2,699. The technology-laden Nasdaq Composite Index given the focus on tech, saw a more pronounced tumble on the day, off 1.5% at 7,445.08.

The Dow Jones Industrial Average on Wednesday relinquished its biggest point gain since February, as selling in shares of bank and technology-and-internet companies offset gains in the resurgent energy sector.

Wednesday's reversal comes as trade-related worries have created anxieties among investors fearful that the current tit-for-tat spat between the U.S. and its trade partners China and the European Union morph into a trade war that damages global economies. An early burst higher in the session, partly underpinned by a White House statement that appeared to imply a more moderated approach by President Donald Trump to curb Chinese investments in U.S. technology companies, gave way to selling.

The ICE U.S. Dollar Index was up 0.5% on Wednesday, on pace for a nearly 1.3% advance in June. A stronger buck can make commodities linked to the currency comparatively more expensive to buyers using other monetary units.

Economic reports at Wall Street showed that orders for durable goods fell 0.6% in May following a revised 1% decline in April, driven by a drop in new orders for trucks and cars. The trade deficit in goods narrowed 3.7% to $64.8 billion in May, which was below the $69.2 billion estimate. Separately, U.S. pending-home sales declined 0.5% to a reading of 105.9 in May.

In corporate news, shares of ConAgra Brands tumbled 7.3% after the company announced it will be acquiring Pinnacle Foods for approximately $8 billion in cash and stock. Shares of Pinnacle Foods lost 4.3%. Meanwhile, shares of 21st Century Fox rallied 2.4% after Walt Disney won DOJ approval to buy most of Fox's assets for $71.3 billion. The deal is subject to the condition that Disney sells 22 regional sports networks.

Bullion prices ended lower at Comex on Wednesday, 27 June 2018. Gold futures marked a third decline in a row, and another settlement at their lowest in more than six months on Wednesday, as the U.S. dollar's strength weighed on the precious metal.

August gold lost $3.80, or 0.3%, to settle at $1,256.10 an ounce, for the lowest settlement since 13 December 2017. The dollar-pegged commodity has been on a persistent downtrend lately, with bullion down 1.4% so far this week and on pace for a monthly decline of 3.7%. September silver, the most active contract, settled down 0.6% at $16.237 an ounce.

Crude oil prices rallied on Wednesday, 27 June 2018 with the U.S. benchmark settling at its highest since 2014 as domestic crude supplies notched their biggest weekly drop of the year so far. Traders also showed concerns over U.S. threats to sanction countries that don't stop importing oil from Iran by 4 November 2018.

On the New York Mercantile Exchange, August West Texas Intermediate crude tacked on $2.23, or 3.2%, to settle at $72.76 a barrel. That was the highest finish since 26 Nov, 2014. August Brent crude, the global benchmark, settled $1.31, or 1.7%, at $77.62 a barrel on ICE Futures Europe, for the highest finish since May.

The U.S. Energy Information Administration reported Wednesday that crude supplies declined by 9.9 million barrels for the week ended June 22, the largest weekly decline so far this year. Market had forecast a fall of 2.3 million barrels, while the American Petroleum Institute on Tuesday reported a drop of 9.2 million barrels. The report also showed that gasoline stockpiles rose by 1.2 million barrels for the week, while distillate stockpiles were unchanged for the week.

On Thursday, investors will receive the third estimate for first quarter GDP and the weekly Initial Claims report.

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