Here are five things you must know for Wednesday, June 20:
1. -- Stocks Rebound Amid Deepening Trade Dispute
U.S. stock futures rose on Wednesday, June 20, and global stocks recovered though investors remained cautious amid the deepening trade dispute between Washington and Beijing.
Sentiment could be blunted, however, by comments from White House trade adviser Peter Navarro, who told reporters in Washington on Tuesday, June 19, that China "miscalculated ... If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels."
Stocks fell sharply on Tuesday after Donald Trump threatened to unleash a fresh round of tariffs on $200 billion worth of goods from China. The Dow finished down 287 points, or 1.15%, to 24,700. The blue-chip index has declined for six straight sessions.
The U.S. economic calendar on Wednesday includes Existing Home Sales for May at 10 a.m. ET, and Oil Inventories for the week ended June 15, at 10:30 a.m.
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2. -- GE Gets Dropped From the Dow
GE was an original member of the index in 1896 and a member continuously since 1907, S&P Dow Jones Indices said.
"Since then the U.S. economy has changed: consumer, finance, healthcare and technology companies are more prominent today and the relative importance of industrial companies is less," said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. "(Tuesday's) change to the DJIA will make the index a better measure of the economy and the stock market."
GE said it was "focused on executing against the plan" it has laid out to improve the company's performance, saying in an email to TheStreet that the "announcement does nothing to change those commitments or our focus in creating a stronger, simpler GE."
GE was down 2.1% in premarket trading.
- General Electric Booted From Dow, Replaced by Walgreens
- General Electric Extends Declines After Shares Dropped From the Dow
3. -- Starbucks to Close 150 U.S. Stores
Shares of Starbucks Corp. (SBUX) - Get Report slumped 4.1% to $55.05 in premarket trading on Wednesday following an announcement from the world's largest coffee chain that it planned to close as many as 150 U.S. stores and cafes in its upcoming fiscal year as competition from rivals has intensified.
The company said it plans to close U.S. stores at triple the normal pace while it looks at strategic options, such as the licensing of company-owned stores, in order to gain a foothold in under-represented markets, including China.
Starbucks said it sees global comparable same-store sales growth of around 1% in the current quarter, sharply lower than the consensus forecast of 3%.
Several investment banks, including Morgan Stanley and Barclays, moved to cut their price targets on the stock following the announcement, with the former dropping it to $59 from $72 and the latter to $60 from $65.
4. -- Oracle Slides After Issuing Soft Guidance
The company on Tuesday posted fiscal fourth-quarter earnings of 99 cents a share on an adjusted basis, beating analysts' estimates by 5 cents. Sales in the quarter were $11.25 billion, also beating forecasts of $11.18 billion, according to FactSet.
During a conference call following the release of the earnings, Oracle guided for revenue in the August quarter to rise 1% to 3% in constant currency, and dollar-based earnings of 67 cents to 69 cents a share. With Oracle expecting foreign exchange to be a 1% headwind, the revenue outlook implies zero to 2% dollar-based growth, which is below estimates that called for 3.4% growth, wrote TheStreet's Eric Jhonsa. Earnings guidance was below consensus of 71 cents.
Jhonsa added the fact that Oracle no longer plans to break out cloud revenue could be heightening investor nervousness about the company's guidance.
5. -- AT&T Is in Talks to Buy AppNexus
AT&T Inc. (T) - Get Report is in talks to acquire advertising technology company AppNexus, The Wall Street Journal reported, citing people familiar with the matter.
AT&T is expected to pay around $1.6 billion for AppNexus, the people said. AppNexus, which is backed by investors including WPP PLC, investment firm TCV and News Corp, was valued at $1.8 billion in a 2015 funding round, according to the Journal.
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