Fed jitters and oil pressure Wall Street; Apple rallies

By Noel Randewich

(Reuters) - Wall Street edged lower on Wednesday as investors focused on future interest rate hikes and as cheaper oil dragged down energy shares, although Apple surged to its highest level this year.

Speculation about the timing of the Federal Reserve's next interest rate hike has shaken major stock indexes since last Friday following contrasting comments from Fed officials.

The S&P 500 remains down almost 3 percent from before Friday's steep selloff, even though interest rate futures indicate expectations for a rate hike at the Fed's Sept. 20-21 meeting remain low.

"What you're seeing is a little preview for what will happen when the Fed does raise rates," said Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners. "People are starting to make changes to their portfolios."

 

Apple jumped 3.4 percent to a 2016 high, with its market capitalization topping $600 billion for the first time since April as Wall Street bet the technology company's newest iPhone would help shore up falling sales.

Its gain helped push the S&P 500 technology index <.SPLRCT> up 0.6 percent, making it the session's strongest sector.

Oil prices dropped 2 percent following data that showed large weekly builds in U.S. petroleum products, sending the S&P energy index <.SPNY> down 1.09 percent.

The Dow Jones industrial average and S&P 500 were negative after giving up earlier gains.

At 2:18 pm ET, the Dow <.DJI> was down 0.12 percent at 18,045.69 points and the S&P 500 <.SPX> had dipped 0.04 percent to 2,126.27.

The Nasdaq Composite <.IXIC> added 0.39 percent to 5,175.24.

Monsanto agreed to be bought by Bayer , but its stock rose just 0.9 percent to $107.06, well below the offer of $128 per share, due to concerns about regulatory approvals.

Vitae Pharmaceuticals shares more than doubled to $20.89 after Allergan said it would buy the company for $639 million. Allergan rose 1.78 percent.

Ford fell 1.8 percent after the automaker said 2017 financial performance would decline from this year's levels.

Declining issues outnumbered advancing ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favoured advancers.

The S&P 500 posted 1 new 52-week high and 3 new lows; the Nasdaq Composite recorded 37 new highs and 35 new lows.

(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Meredith Mazzilli)