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Midday Update: Stocks Retreat on Lower Oil, Dollar's Impact on Exporters


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Stocks have drifted into negative territory on Wednesday as this week's record-setting rally was extinguished by a steep sell-off in oil and rally in the dollar against the yen that could threaten profits of multi-national U.S. corporations.

Although both the Dow Jones Industrial Average and S&P 500 reached new all-time highs at Wednesday's open, they have retreated on losses in the energy, financial and consumer discretionary sectors. Defensive sectors are trading higher while Treasury yields move lower across all maturities. Crude oil futures were lower on a less-than-expected drop in supply from the American Petroleum Institute.

Wall Street is also taking a cautious approach ahead of the latest Beige Book in the event there is tangible evidence that the economy has snapped back from a sluggish spring, which would give the Federal Reserve ammunition to raise interest rates in September.

Wednesday's other economic data was a non-event as import prices were up 0.2% versus +0.5% expectations, but export prices jumped 0.8% versus +0.3% estimates.

Additionally, the Atlanta Fed business inflation survey revealed an expectation for inflation to decline to an annual pace of 1.7% from 1.8% previously.

European equities also come off their earlier highs in sympathy with the U.S, as UK investors retreated to the sidelines ahead of Thursday's pivotal Bank of England meeting, the first since the UK vote to leave the European Union on June 23. Although the BoE is expected to lower interest rates for the first time in seven years, the cuts could be accompanied by dour projections for the UK as well as Euro-zone economies. Shares of exporters took the brunt of today's retracement in light of the recent rally in sterling.

Crude oil was down $1.92 to $44.88 per barrel. Natural gas was down $0.01 to $2.69 per 1 million BTU. Gold was up $7.20 to $1,342.20 an ounce, while silver was up $0.20 to $20.38 an ounce. Copper was up $0.03 to $2.24 per pound.

Among energy ETFs, the United States Oil Fund was down 4.02% to $10.75 with the United States Natural Gas Fund was down 0.93% to $8.04. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 2.96% to 30.27 while SPDR Gold Shares were up 0.76% to $128.11. The iShares Silver Trust was up 1.00% to $19.28.

Here's where the markets stand at mid-day:

US MARKETS

NYSE Composite Index was down 25.13 points (-0.23%) to 10,701.65

Dow Jones Industrial Index was down 29.81 points (-0.12%) to 18,327.01

S&P 500 was down 3.75 points (-0.18%) to 2,148.21

Nasdaq Composite Index was down 12.55 points (-0.25%) to 5,010.16

GLOBAL SENTIMENT

FTSE 100 was up 16.32 points (+0.24%) to 6,697.01

DAX was down 33.36 points (-0.34%) to 9,930.71

CAC 40 was up 3.88 points (+0.09%) to 4,335.26

Nikkei 225 was up 135.78 points (+0.84%) to 16,231.43

Hang Seng Index was down 97.63 points (+0.46%) to 21,322.37

Shanghai China Composite Index was up 11.31 points (+0.37%) to 3,060.69

NYSE SECTOR INDICES

NYSE Energy Sector Index was down 175.81 points (-1.61%) to 10,749.69

NYSE Financial Sector Index was down 19.37 points (-0.32%) to 6,008.96

NYSE Healthcare Sector Index was up 15.34 points (+0.12%) to 12,983.44

UPSIDE MOVERS

(+) IMPR (+31.17%) To be acquired by Thoma Bravo for $544 million

(+) NETE (+16.69%) Announced $10 million stock purchase agreement with Esousa Holdings

(+) JUNO (+15.69%) FDA removed clinical hold on phase 2 trial of JCAR015 for treatment of acute lymphoblastic leukemia

(+) KITE (+6.51%) Up in tandem with Juno, price target raises at Stifel Nicolaus to $74 from $63, buy rating confirmed

DOWNSIDE MOVERS

(-) LEDS (-18.84%) Q2 sales and profit fell from year ago

(-) DNR (-9.40%) Lower in sympathy with oil

(-) MIK (-7.58%) Announced 11 million share offering, expects Q2 results at the lower-to-middle range of earlier outlook

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.



This article appears in: Investing , Stocks
Referenced Symbols: NETE



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