Wall St. dips as oil slide drags down energy shares
U.S. stocks were slightly lower on Wednesday as a steep fall in crude oil prices hit energy shares, more than offseting gains in technology and bank stocks.
The S&P 500 index slipped after coming within spitting distance of a record high following a four-day rise. It is about half a percent away from the all-time high it hit on Jan. 26.
Crude oil prices tumbled more than 3.5 percent on slowing Chinese demand and trade issues, leading to a 1.29 percent drop in the energy sector <.SPNY>, which was also the biggest drag on the S&P. [O/R]
Dow components Chevron <CVX.N> dropped 1.2 percent and Exxon <XOM.N> 1 percent. China’s tit-for-tat response to the Trump administration’s latest round of tariffs dragged down shares of trade-sensitive stocks such as Caterpillar <CAT.N> and Boeing <BA.N>. The two companies weighed the most on the Dow Jones index.
The losses, however, were limited due to gains in technology shares, led by Google-parent Alphabet <GOOGL.O>, Facebook <FB.O> and Microsoft <MSFT.O>.
“The underlying sentiment is that the trade issue is more of a short-term event and not a long-term issue,” said Jimmy Lee, founder and CEO of Wealth Consulting Group, a Las Vegas-based wealth management firm.
“If you look at the fundamentals, earnings are really good and the economy is growing really fast and we’re finally getting growth after a long time.”
A strong earnings season has kept up the momentum in the markets and cushioned major blows from trade-related issues.
As the second-quarter earnings season winds down, the estimate for profit growth of S&P companies in the second quarter has risen to 24.1 percent, higher than 20.7 percent at the start of July, according to Thomson Reuters I/B/E/S.
At 12:28 a.m. EDT the Dow Jones Industrial Average <.DJI> was down 61.82 points, or 0.24 percent, at 25,567.09, the S&P 500 <.SPX> was down 2.30 points, or 0.08 percent, at 2,856.15 and the Nasdaq Composite <.IXIC> was down 4.03 points, or 0.05 percent, at 7,879.64.
Five of the 11 major S&P sectors were higher, with financial stocks <.SPSY> leading the gains.
Shares of Bank of America <BAC.N>, JP Morgan <JPM.N> and Wells Fargo <WFC.N> rose between 0.6 percent and 0.9 percent, lifting the sector.
Tesla <TSLA.O> shares were down 2.4 percent, following a steep rise a day earlier on Chief Executive Officer Elon Musk’s plan to take the company private. Walt Disney <DIS.N> fell 1.4 percent and was among the biggest decliners on the Dow after its quarterly profit missed estimates.
Mylan fell 3 percent after the drugmaker said it was evaluating a wide range of options and reported a quarterly profit that missed estimates.
Declining issues outnumbered advancers for a 1.33-to-1 ratio on the NYSE and for a 1.16-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and three new lows, while the Nasdaq recorded 63 new highs and 65 new lows.
(Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva)
Published at Wed, 08 Aug 2018 11:47:22 -0700