Wall Street slips as oil weighs; Thursday's events awaited

By Tanya Agrawal

REUTERS - U.S. stocks slipped in early afternoon trading on Wednesday, weighed down by a fall in oil prices, while caution reigned ahead of Thursday's major political and economic events.

Oil prices fell more than 4 percent due to an unexpected rise in U.S. crude inventories and took a toll on the energy sector, which dropped 2.1 percent. [O/R]

Exxon's 0.7 percent fall and Chevron's 1.3 percent fall were among the biggest drags on the S&P 500 and the Dow.

Investors are also keeping a watch on Britain's general election, the European Central Bank's policy meeting and former FBI Director James Comey's testimony before a Senate panel on Thursday.

 

Opinion polls have shown British Prime Minister Theresa May's lead over the opposition Labor party narrow over the last three weeks, with some even suggesting she could fall short of a majority government.

The election could determine whether the country has a smooth or hard exit from the European Union.

"If the Conservative party extends its majority, markets will be pretty calm, but anything less than that is going to have people worried about how we approach the Brexit negotiation," said Luke Hickmore, senior investment manager at Aberdeen Asset Management.

Comey's first public appearance since he was fired by U.S. President Donald Trump might shed more light on a probe by the FBI into alleged Russian meddling in last year's U.S. presidential election.

Any damaging revelation in Comey's testimony could dampen already flagging momentum for Trump's pro-business fiscal agenda.

"I think the Comey news led to an initial surprise but the rebound was equally swift," said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co.

"I'm not sure that unless Comey says something completely shocking or he suggests something that there's no way the House can't consider obstruction of justice ... aside from that I don't see his testimony as market moving."

The ECB will also hold its policy meeting on Thursday and is expected to reiterate its plan to extend the money-printing scheme at least until the end of the year.

At 12:53 p.m. (1653 GMT), the Dow Jones Industrial Average was down 13.5 points, or 0.06 percent, at 21,122.73 and the S&P 500 was down 3.46 points, or 0.14 percent, at 2,425.87. The Nasdaq Composite was down 5.79 points, or 0.09 percent, at 6,269.27.

Seven of the 11 major S&P 500 sectors were higher, with the financial index's 0.78 percent rise leading the advancers.

Shares of Navistar International were down 4.2 percent at $28.68 after the truck and engine maker posted a quarterly loss.

Declining issues outnumbered advancers on the NYSE by 1,526 to 1,283. On the Nasdaq, 1,444 issues rose and 1,343 fell.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)