Weak housing data and lower crude price sour momentum
US stocks ended Wednesday, 24 August 2016 on a lower note as a weaker-than-expected reading of existing home sales for July and a downturn in crude oil pressured the broader market. Other focal points impacting today's trade included a rebound in the dollar, caution ahead of Friday's speech from Fed Chair Yellen, and relative weakness from the heavily-weighted technology and health care sectors. The S&P 500 and Dow industrials on Wednesday finished at their lowest levels since early August.
The Dow Jones Industrial Average gave up 65.82 points, or 0.4%, at 18,481.48. The S&P 500 index lost 11.46 points, or 0.5%, to end at 2,175.44. The Nasdaq Composite Index suffered the brunt of the market's retreat, trading down 42.38 points, or about 0.8%, to close at 5,217.69.
Following Mylan's lead, the health-care sector was off 1.6%, representing the sharpest loss among the index's 10 sectors. Mylan has been in focus for the past several sessions as lawmakers have criticized the drugmaker's decision to raise the price of its EpiPens, widely used to treat anaphylactic shock. Shares sank 5.4%, and are off more than 11% this week. Shares of UnitedHealth Group and Merck & Co. were each off more than 1%, dragging the blue-chip benchmark into the red.
The major averages slipped at the beginning of the session as investors responded to a downturn in crude oil and a weaker-than-expected Existing Home Sales Report for July.
The National Association of Realtors said Wednesday that July sales of previously owned homes fell 3.2% to a seasonally adjusted annual rate of 5.39 million. That was lower than the 5.48 million pace that market had forecast and 1.6% lower than a year ago.
Investors have mostly held off on big bets on Wall Street ahead of comments from Fed Chairwoman Janet Yellen at the central bank's retreat at Jackson Hole. Yellen's speech there will be closely watched for hints about U.S. monetary policy and the path of interest rates.
Bullion prices fell on Wednesday, 24 AUgust 2016 at Comex. Gold futures fell Wednesday to log their lowest finish in about a month, as investors hope for clarity this week on the near-term path for interest rates.
December gold dropped $16.40, or 1.2%, to settle at $1,329.70 an ounce. December silver shed 37.7 cents, or 2%, to $18.688 an ounce.
Crude oil futures sank on Wednesday, 24 August 2016 to settle at a one-week low as U.S. government data confirmed a larger-than-expected weekly rise in crude inventories, wiping out earlier support from optimism that Iran could agree to a production freeze accord.
October West Texas Intermediate crude fell $1.33, or 2.8%, to settle at $46.77 a barrel on the New York Mercantile Exchange. That was the lowest settlement for a most-active contract since mid AUgust. Prices traded around $47.50 before supply data.
The U.S. Energy Information Administration early Wednesday reported that domestic crude supplies rose by 2.5 million barrels in the week ended 19 August 2016. That was significantly above the 200,000-barrel climb expected by market. Total U.S. crude output, meanwhile, fell by 49,000 barrels a day to 8.548 million barrels a day for the latest week.
Treasuries ended on a mixed note as the long end of the curve displayed relative weakness. The yield on the benchmark 10-yr note finished higher by one basis point at 1.56%.
Today's participation was below the recent average as fewer than 737 million shares changed hands at the NYSE floor.
Tomorrow's economic data will include weekly initial claims (consensus 265k) and Durable Goods Orders for July (consensus 3.5%), which will each cross the wires at 8:30 ET.
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