Dow Closes Up 550, 2.2%, as Stronger Micron Outlook Lifts Tech

Stocks end higher as an outlook boost from Micron Technology lifts shares of fellow chipmakers.
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Stocks finished higher Wednesday after Micron Technology  (MU) - Get Report boosted its earnings forecast and lifted shares of fellow chipmakers.

Equities had been mixed for much of Wednesday's session as Wall Street assessed rising tensions between Washington and Beijing regarding Hong Kong.

The Dow Jones Industrial Average finished up 553 points, or 2.21%, to 25,548, the S&P 500 gained 1.48% and the Nasdaq gained 0.77%. The S&P 500 and the Nasdaq traded lower earlier in the day.

American Express  (AXP) - Get Report, Goldman Sachs  (GS) - Get Report, and JPMorgan Chase  (JPM) - Get Report led the Dow's advance.

Micron rose 8% to $49.45 after raising its earnings and sales forecast for the fiscal third quarter.

Stocks finished higher Tuesday and the S&P 500 crossed 3,000 intraday for the first time since early March as investors embraced moves by economies across the globe to ease coronavirus lockdowns and welcomed signs of progress toward a Covid-19 vaccine.

"We expect further volatility as the economy starts to reopen," said Andrew Smith, chief investment strategist of Delos Capital Advisors of Dallas. "With the market showing signs of a risk-on attitude, we believe a dollar-cost averaging approach to putting new money to work is most prudent. 

"We have started to tilt our portfolio out of defensive sectors, like consumer staples and utilities, and in favor of sectors tied to economic rebounds, such as financials, industrials, high beta and pure value," Smith added.

Secretary of State Mike Pompeo said the U.S. has certified that Hong Kong is no longer politically autonomous from China, Bloomberg reported. On Tuesday, the news service said the Trump administration was considering a range of sanctions to try to punish China for its crackdown on Hong Kong.

President Donald Trump is “displeased with China’s efforts and that it’s hard to see how Hong Kong can remain a financial hub if China takes over,” White House press secretary Kayleigh McEnany said Tuesday.

Meanwhile, the Federal Reserve's Beige Book, a report on current economic conditions was released on Wednesday. The report said that economic activity declined in all districts, falling sharply in most, to reflect the disruptions brought on by the coronavirus pandemic.

Declines were especially severe in the leisure and hospitality sector, with very little activity in travel and tourism businesses, the report said.