Slumping crude prices sour momentum
The stock market ended the midweek affair on a mixed note on Wednesday, 14 September 2016, as investors favored a cautious approach ahead of a plethora of economic data and the latest policy statement from the Bank of England. The Dow industrial and the S&P 500 closed in negative territory Wednesday in the wake of slumping crude-oil prices, erasing earlier gains for the major benchmarks, while the tech-heavy Nasdaq bucked the losing trend.
The Dow Jones Industrial Average slid 31.98 points, or 0.2%, to close at 18,034.77. The S&P 500 index fell 1.25 points to end at 2,125.77, weighed by a 1.2% drop in the energy sector. The Nasdaq Composite Index advanced 18.52 points, or 0.4%, to close at 5,173.77.
In the tech sector, Apple climbed 3.6% as analysts outlined reasons the tech giant is still a buy. However, the tech giant's gains were overshadowed by big declines in IBM and Boeing.
The economic calendar was relatively thin on Wednesday. Market reaction to the August import-price index was muted. Import prices slipped 0.2% due to lower oil, while export prices dropped 0.8%, driven by a fall in farm crop prices.
Shares of Monsanto rose 0.6% after Bayer raised its offer for the U.S. seeds major to $128 a share. Both companies announced Wednesday that they had approved the deal.
Ford Motor Co. fell 1.9% after the car maker outlined plans to deliver profitable growth for the next several years, including investing in electric and autonomous vehicles.
The benchmark 10-year Treasury slid 4.3 basis points to 1.691%.
But as crude oil's decline accelerated, stocks failed to capitalize on their gains. A report on oil supplies published by the Energy Information Administration showed inventories declined by 600,000 barrels last week, much smaller than the 14.5 million barrel drop from the week before. Oil prices briefly spiked after the report, but have since turned lower as analysts concluded that the sector is still bogged down by excess inventory. West Texas Intermediate crude for October delivery settled at a two-week low.
Bullion prices ended higher at Comex. Gold futures settled higher on Wednesday, as support from a retreat in the U.S. dollar prompted prices to snap a five-day slide. But investors remained wary ahead of next week's meetings for the U.S. Federal Reserve and Bank of Japan that may yield changes to monetary policy.
December gold rose $2.40, or 0.2%, to settle at $1,326.10 an ounce. December silver rose 9.1 cents, or 0.5%, to $19.066 an ounce.
Today's participation was above the recent average as more than 878 million shares changed hands on the NYSE floor.
Tomorrow's economic data will include weekly initial claims, Retail Sales for August, PPI for August, the Philadelphia Fed Survey for September, the second quarter Current Account Balance and Empire Manufacturing for September each crossing the wires at 8:30 ET. Separately, Industrial Production and Capacity Utilization for August will be released at 9:15 ET while Business Inventories for July will cross the wires at 10:00 ET.
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