Wednesday's Stock Market Close: US Equities Close Narrowly Mixed As House Prepares To Impeach Trump

U.S. stocks closed narrowly mixed on Wednesday as the House of Representatives debated articles of impeachment against President Donald Trump, with a vote scheduled for the evening.

The Dow Jones Industrial Average slipped 26.22 points to 28,240.94 while the S&P 500 edged down 1.25 points to 3,191.27 and the Nasdaq Composite Index rose 4.38 points to 8,827.73.

Volume on the New York Stock Exchange totaled 3.06 billion shares with 1,843 issues advancing, 169 setting new highs, and 1,133 declining, with seven setting new lows.

Active movers were led by General Electric Co. (GE), Advanced Micro Devices Inc. (AMD) and Ford Motor Co. (F).

The House was to vote Wednesday about 7 p.m. on two articles of impeachment against Trump, setting up another vote in the U.S. Senate in January. Trump is accused of abuse of power and obstruction of Congress.

But markets do not seem worried by Trump’s impeachment saga since he’s likely to be acquitted by Republicans who control the Senate.

“Chalk up one more reason why U.S. equity markets have the wind in their sails just now,” said Nicholas Colas, co-founder of DataTrek Research. “The odds of a distracting political contretemps in 2020 are diminishing. The 2020 presidential race, at least by current measures, is shaping up to be more about personalities [Trump versus Biden] than a vote on U.S. economic norms. That said, there’s plenty of time for things to change. But that’s where things are today.”

Meanwhile, uncertainties and skepticism abound over the U.S.-China trade deal as Beijing has said little concrete about it.

In a news briefing Wednesday, Chinese Foreign Ministry spokesman Geng Shuang avoided answering questions about the terms of the phase one trade deal. “I have no further news at this time and there is nothing to update,” Geng said.

Analysts were concerned about lack of details.

“There remain more questions than answers,” Chris Krueger, Washington strategist at Cowen, said in a note. “[It’s] more trade truce than deal. It is unclear if any China tariffs on U.S. goods have been reduced.” Krueger also noted the “vague promises” made by China on intellectual property protections.

Part of the trade deal involves an alleged pledge by the Chinese to buy $40 billion in American farm goods over a two-year period.

“U.S. agriculture is a key signpost to monitor as the phase one deal appears to be ‘ag centric’ and may moderately boost U.S. crop prices and volatility,” Cesar Rojas, global economist at Citi, said in a note. “However, uncertainty persists about the actual volumes of Chinese soybean, grain and pork purchases, with details on firm commitments lacking and likely to be worked out and also ‘phased in’ over a few years.”

The Mortgage Bankers Association said total mortgage application volume fell by 5% from the prior week.

In a speech at the Economic Club in Indianapolis on Wednesday, Chicago Federal Reserve President Charles Evans said the U.S. economy is doing "remarkably well,” but inflation remains too low, running below the Fed's 2% target.

Hughes said monetary policy is in "a good place," but the Fed should let inflation rise above the 2% level so it can average 2% over a long period of time.

New York Federal Reserve President John Williams told CNBC on Wednesday that the central bank would have to see substantial changes in the economy before it would consider changes in monetary policy.

"Monetary policy is in a good place,” Williams said. “But, as we’ve proved in the past, if economic conditions shift, change in a material way; obviously we’re ready to adjust our policy views accordingly.”

The Fed has cut rates three times this year.

“With the rate cuts that we did this year, we created a situation where monetary policy is supportive and accommodating growth,” Williams said. “That’s a good position given what’s going on in the economy.”

Overnight in Asia, markets finished mixed. The Hang Seng gained 0.15% while Japan’s Nikkei-225 slipped 0.55% and China’s Shanghai Composite fell 0.18%.

European markets finished mixed with the FTSE 100 edged up 0.21% while Germany's DAX fell 0.49% and France's CAC 40 slipped 0.15%.

Crude oil futures fell 0.02% at $60.93 per barrel and Brent crude slipped 0.03% at $66.15. Gold futures slipped 0.07%.

The euro fell 0.30% at $1.119 while the pound sterling dropped 0.34% at $1.3087.

The yield on the 10-year Treasury rose 1.85% to 1.924% while yield on the 30-year Treasury gained 1.51% to 2.351%.