Major US stock indices predominantly declined, as the collapse of the utility sector shares leveled positive news from statements by US Treasury Secretary Mnuchin that the US and China are close to concluding a trade deal.

“We went about 90% of the way (with the deal), and I believe that there is a way to complete this,” Mnuchin told CNBC on Wednesday without providing detailed information about the remaining 10% of the way to reaching the final agreement. He also said he was confident that US President Donald Trump and Chinese President Xi Jinping could make progress in the stalled trade negotiations at the upcoming G-20 meeting this weekend.

In turn, Donald Trump said today in an interview with Fox Business that a trade deal between the United States and China is possible, but said that he was “very pleased with where we are now.” He also said that he would introduce additional tariffs on Chinese imports if there is no trade deal with China.

The focus was also on the reporting of the manufacturer of microchips Micron (MU). The company reported quarterly earnings of $ 1.05 per share, which was $ 0.26 above the average forecast of analysts. Revenue also exceeded analysts' expectations. Micron said it expects demand for its chips to recover later this year. MU shares jumped 13.3%, boosting Philadelphia Semiconductor's stock index.

Market participants also analyzed the latest US data. According to a report by the US Department of Commerce, new orders for durable goods fell by 1.3% in May after falling by a revised 2.8% in April. The continued decline surprised economists, who expected orders for durable goods to grow by 0.2% compared with a 2.1% fall, which was originally reported in the previous month. Meanwhile, with the exception of another drop in orders for transportation equipment, orders for durable goods rose by 0.3% in May, after declining by 0.1% in April. Economists had expected a growth rate of 0.1%.

DOW components finished bidding mixed (15 in positive, 15 in negative). The growth leader was Intel Corp. (INTC + 2.86%). The Travelers Companies, Inc. shares turned out to be an outsider. (TRV; -2.89%).

Almost all sectors of the S & P recorded an increase. The largest growth was shown by the raw materials sector (+ 0.9%). More than the rest, the utility sector decreased (-1.7%).

At the time of closing:

Dow 26,536.82 -11.40 -0.04%

S & P 500 2,913.78  -3.60 -0.12%

Nasdaq 100 7,909.97 +25.25 +0.32%

Analysts at Wells Fargo note that the May drop of 1.3% in durable goods orders reflects mostly aircraft weakness amid Boeing’s struggles, while the details are better with upticks in core capital goods orders and shipments, but the factory sector remains under pressure.

• “Durable goods orders for the month of May fell 1.3%, a full point worse than consensus expectations. The miss piles on to the recent run of worse than expected data coming from a broad swath of the economy, including the manufacturing sector but also housing and the consumer. Looking under the hood, however, suggests that capital spending is not falling off the rails, but equipment spending is still set to decline in the second quarter.
• Durable goods orders are particularly prone to miss forecasts based on the volatility in the sizeable aircraft sector. Boeing’s recent challenges with their 737 MAX model have amplified the importance of the transport sector on a month-to-month basis. Net cancellations led to nearly a 30% drop in nondefense aircraft orders over the month. That followed almost a 40% decline the previous month and obscures a modestly firmer trend in underlying core orders.
• While core capital goods orders suggest businesses are not fully retrenching as they await clarity on trade and contend with slowing growth abroad, equipment spending still looks set to contract this quarter.
• The upshot is that the pipeline for manufacturing remains weak, but is likely not as dire as recent regional PMIs or total durable goods orders suggest. The tabling of Mexican tariffs points to some room for improvement, but without a resolution to trade disputes with China, we expect factory activity to continue to languish amid the resulting uncertainty and floundering global growth.”

U.S. stock-index futures rose moderately on Wednesday, helped by the statement by the U.S. Treasury Secretary Steven Mnuchin that the U.S. and China were close to reaching a trade deal.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Micron (MU) reported Q3 FY 2019 earnings of $1.05 per share (versus $3.15 in Q3 FY 2018), beating analysts’ consensus of $0.79.

The company’s quarterly revenues amounted to $4.788 bln (-38.6% y/y), beating analysts’ consensus estimate of $4.698 bln.

The company also said it saw Q4 revenue in the range of $4.3-4.7 bln (versus analysts’ consensus estimate of $4.558 bln) and Q4 EPS in the range of $0.38-0.52 (versus analysts’ consensus estimate of $0.70).

MU rose to $35.50 (+8.63%) in pre-market trading.

FedEx (FDX) reported Q4 FY 2019 earnings of $5.01 per share (versus $5.91 in Q4 FY 2018), beating analysts’ consensus of $4.83.

The company’s quarterly revenues amounted to $17.807 bln (+2.8% y/y), generally in line with analysts’ consensus estimate of $17.851 bln.

The company guides its FY2020 non-GAAP EPS to show a mid-single-digit percentage point decline while analysts’ consensus is estimating 4% EPS growth.

FDX rose to $158.75 (+1.78%) in pre-market trading.