The major averages trimmed losses in midday trade as oil recovered to boost the energy sector and Apple turned higher to gain more than 1 percent.
Earlier, stocks plunged for a second day in a row as the yuan declined against the dollar for a second day, increasing negative sentiment on China’s economic growth.
“It’s still a reaction to the Chinese yuan and the fear that many individual stocks are in oversold territory. The pressure will be on the overall stocks to hold 2,060/2,065 on the SPX cash,” JJ Kinahan, chief strategist at TD Ameritrade, said of morning trade.
The People’s Bank of China set the yuan fixing at 6.3306 against the U.S. dollar on Wednesday, 1.6 percent weaker than the previous day’s level.
The move signaled Beijing’s new commitment to set the daily fixings according to the previous day’s closing spot prices and market-moves of other major currencies.
Theextended losses, dipping to 6.42 per dollar, its weakest level in four years, fueling expectations of more sustained weakness and a feared “currency war”—where countries artificially weaken their currencies to gain a competitive advantage.
The currency jumped 1 percent towards the end of the session asin the foreign exchange markets in final minutes of trading to prevent an excessive fall in the value of the yuan, The Wall Street Journal reported Wednesday.
closed down 5.12 percent after initially plunging 7.9 percent to a post-IPO low. The China-based e-commerce giant missed on revenue and posted the slowest growth in more than three years. However, adjusted quarterly profit was 59 cents per share, 1 cent above estimates.
“I’m surprised BABA is down so much,” said Brendan Ahern, chief investment officer at KraneShares, which provides China-focused ETFs. “Core business was solid—(gross merchandise value) and users grew great. Compensation expense is large. Not that bad of a quarter, though all the headline news around China isn’t going to help.”
plunged more than 5 percent after reporting on both the top and bottom line. The retailer also lowered its forecast.
U.S. stocks closed lower by about 1 percent on Tuesday after an unexpected move overnight by the People’s Bank of China to depreciate the yuan by nearly 2 percent. The Dow Jones industrial average closed about 210 points lower, wiping out most of Monday’s gains. The index’s 50-day moving average fell below its 200-day moving average, a bearish condition many analysts term a “death cross.”
Federal Reserve policies can benefit U.S. labor markets but cannot alone solve the so-called skills mismatch between workers and employers, New York Fed President William Dudley said in prepared remarks.
totaled 5.2 million in June, versus 5.3 million expected.
Marie Schofield, chief economist and senior portfolio manager at Columbia Threadneedle Investments, said the three-month averages on JOLTS and nonfarm payrolls is “not showing anything other than status quo in hiring.”
She said China’s yuan devaluation put more of a question market around a September rate hike than the data.
Treasury yields turned higher, with theat 2.15 percent and the at 0.67 percent.
The Treasury Department auctioned $24 billion in 10-year notes at a high yield of 2.115 percent, the lowest since April.
The U.S. dollar fell more than 1 percent against major world currencies as the euro approached $1.12.
Crude oil recovered from Tuesday’s six-year low, settling up 22 cents, or 0.5 percent, at $43.30 a barrel. Brent traded near $49.60 a barrel.
Gold ended up $15.90 at $1,123.60 an ounce.
Theclosed down 0.33 points, or 0.00 percent, at 17,402.51, with leading decliners and the greatest advancer.
Theclosed up 1.98 points, or 0.10 percent, at 2,086.05, with energy leading six sectors higher and financials the greatest laggard.
Theclosed up 7.60 points, or 0.15 percent, at 5,044.39.
The, widely considered the best gauge of fear in the market, traded below 15.
Decliners were a hair ahead of advancers on the New York Stock Exchange, with an exchange volume of 877 million and a composite volume of 4.1 billion in the close.
On tap this week:
Earnings: Cisco, Macy’s, News Corp., Alibaba, NetEase, Markit, Wayfair
Earnings: Nestle, Kohl’s, Nordstrom, Applied Materials, Flowers Foods, El Pollo Loco, King Digital, Party City
8:30 a.m.: Initial claims, retail sales, import prices
10 a.m.: Business inventories
1 p.m.: $16 billion 30-year auction
8:30 a.m.: PPI
9:15 a.m.: Industrial production
10 a.m.: Consumer sentiment