Stocks mixed on US-China trade concerns, Fed chair comments

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Sound Income Strategies CEO David Scranton on the state of the markets, Federal Reserve policy and the outlook for the U.S. economy.

Stocks closed mixed Wednesday after comments by U.S. Trade Representative Robert Lighthizer that issues with China are "too serious" to be resolved by promises of more purchases of U.S. goods by Beijing.

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But equities got a lift after Fed Chairman Jerome Powell, testifying on Capitol Hill for the second day, said the U.S. central bank was close to a decision to end the reduction of bonds in its $4 trillion balance sheet.

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Powell said that the central bank would remain "patient" in deciding on further interest rate hikes and that rising risks and recent soft economic data should not prevent solid growth for the economy this year.

Retailers' stocks helped buoy the market. Campbell Soup reported better-than-expected adjusted earnings, helped by its acquisitions of Snyder's-Lance and Pacific Foods. Excluding items, the company earned 77 cents a share, beating the average analyst estimate of 70 cents.

Shares of Best Buy surged after the retailer gave an upbeat profit forecast for the year while reporting better-than-expected holiday-quarter sales, as it benefited from higher demand for wearable devices, gaming consoles and appliances.

TickerSecurityLastChange%Chg
I:DJIDOW JONES AVERAGES26935.07-159.72-0.59%
SP500S&P 5002992.07-14.72-0.49%
I:COMPNASDAQ COMPOSITE INDEX8117.674437-65.20-0.80%

The stock of home improvement chain Lowe's rose modestly after the company beat Wall Street earnings forecasts, but reported disappointing sales growth as it predicted more weakness in Canada following the closure of dozens of unprofitable stores.

Shares of the big health insurers and health care services firms fell as did stocks of some of the biggest pharmacy benefit managers (PBMs). PBMs came under some scrutiny in Tuesday's Senate hearing on drug prices. UnitedHealth Group,  Cigna, home to Express Scripts, and CVS Health, parent of Caremark RX, were also big losers.

TickerSecurityLastChange%Chg
CPBCAMPBELL SOUP CO.46.76+0.15+0.32%
BBYBEST BUY66.77-0.82-1.21%
LOWLOWE'S COMPANIES INC.110.96-0.91-0.81%
UNHUNITEDHEALTH GROUP INCORPORATED232.89+0.04+0.02%
CICIGNA CORPORATION161.38-3.33-2.02%
CVSCVS HEALTH CORPORATION64.30+0.67+1.05%

In economic news, new orders for U.S.-made goods barely rose in December and business spending on equipment was much weaker than previously thought. Factory goods orders edged up 0.1 percent, the Commerce Department said on Wednesday, amid declining demand for machinery and electrical equipment, appliances and components.

Contracts to buy previously owned homes rose in January, the National Association of Realtors said on Wednesday. The NAR's pending home sales index increased to a reading of 103.2, up 4.6 percent from the prior month. December's index was revised to 98.7 from 99.0.

Crude oil prices rose after the government said there had been a large drawdown of the commodity's inventories.

Meanwhile, the second summit between North Korean leader Kim Jong Un and Donald Trump was underway Wednesday in Hanoi. Investors were looking for developments there.

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In Asian markets on Wednesday. China’s Shanghai composite added 0.4 percent, Hong Kong’s Hang Seng slipped less than 0.1 percent and Japan’s Nikkei added 0.5 percent.

In Europe, the major markets closed lower. London’s FTSE fell 0.6 percent, Germany’s DAX was off 0.5 percent and France’s CAC was off 0.3 percent.

FOX Business' Ken Martin contributed to this report.