KO Coca Cola Company

By Ben St. Clair and Danielle Chemtob 

The Dow Jones Industrial Average turned higher Wednesday as investors balanced trade relations with another wave of strong corporate-earnings reports.

The blue-chip index climbed 17 points, or less than 0.1%, to 25259 in recent trading, after earlier declining as much as 128 points. The S&P 500 rose 0.3%, and the technology-heavy Nasdaq Composite gained 0.6%.

European Commission President Jean-Claude Juncker is visiting the White House later Wednesday, with trade expected to top the agenda. Shares of Ford and General Motors fell 3% and 6.2%, respectively, over heightened concerns that President Donald Trump will proceed with a plan to levy tariffs on auto imports. General Motors also lowered its 2018 profit outlook based partly on unexpectedly high raw-materials costs in the wake of U.S. tariffs on steel and aluminum.

Brad McMillan, chief investment officer for Commonwealth Financial Network, said investors don't have high expectations for the meeting.

"If we don't have another confrontation, that will be treated as a victory," he said.

In a tweet Tuesday, President Donald Trump called tariffs "the greatest, " reiterating their use as punishment for countries that fail to negotiate a "fair deal" with the U.S. Later, he suggested the EU and U.S. drop all tariffs, barriers and subsidies.

Investors are balancing uncertainty over trade conflicts with what is shaping up to be a strong corporate-earnings season. About 28% of companies in the S&P 500 have reported results for the latest quarter, and earnings are up 20% so far for companies in the index that have reported.

Coca-Cola and United Parcel Service both posted stronger-than-expected revenue growth, pushing their shares up 1.9% and 6%, respectively.

But Boeing shares slumped 2.3% as its results weren't as strong as some analysts and investors expected. The aerospace giant, though, raised its revenue outlook for 2018 despite the trade tensions the company has said will affect its input costs.

AT&T, meanwhile, reported lower revenue in its latest quarter as its satellite-TV business suffered major losses. Its shares dropped 4.5%.

"I think what a lot of people are focused on today is the question mark of, have we seen peak earnings power because the first half of 2018 has been so strong?" said Martin Jarzebowski, vice president and portfolio manager with Federated Investors.

The technology sector rose 1% ahead of Facebook's earnings report after the closing bell. Investors will be looking for signs the questions over the social media giant's handling of user data have affected its business.

David Kelly, chief global strategist at J.P. Morgan Asset Management, said regulation is a looming threat for technology companies.

"When profit margins are this high, the temptation for politicians one way or the other to skim a little bit off the top is going to grow," he said.

The strengthening dollar is another growing headwind for technology companies, which derive a significant percentage of their revenue abroad. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, slipped 0.3% but is up 2.4% for the year.

"A stronger dollar is not a beneficial dynamic for a lot of companies," Mr. Jarzebowski said.

The yield on the 10-year Treasury note fell to 2.937%, according to Tradeweb, from 2.949% Tuesday. Yields fall as prices rise.

In commodity markets, crude oil added 1.1% to $69.29 a barrel after government data showed a larger-than-expected drop in crude inventories.

Elsewhere, the Stoxx Europe 600 fell 0.3%. In Asia, the Shanghai Composite Index dropped 0.1% and Japan's Nikkei Stock Average added 0.5%.

(END) Dow Jones Newswires

July 25, 2018 15:00 ET (19:00 GMT)

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