Markets

Midday Update: Rally Stalls as Lower Oil Futures, Strengthening Dollar Weighs

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Stocks were trading mostly lower in midday trade on Wednesday as investors cashed in on some post-Election Day gains, bringing a seven-day run in the Dow Jones Industrial Average to a quiet end. The financial sector was leading decliners among the eleven S&P 500 sectors, while technology shares continued to outperform and recoup last week's heavy losses.

The strengthening dollar's impact on U.S. multinationals also helped put the brakes on the rally with shares of large exporters down by more than 1%.

Shares opened lower after digesting below-consensus inflation and production data, neither of which dimmed expectations for the Federal Open Market Committee to hike rates next month.

Wholesale prices were unchanged in October but were down 0.2% excluding the volatile food and fuel segment. This compares to estimates for the nominal PPI to increase 0.3% and the core to rise by 0.2%.

Following was a small decline in capacity utilization in October to 75.3% from 75.4% while industrial production was unchanged, both missing expectations to stay unchanged at 75.4% and increase by 0.1%, respectively.

The morning's remaining data included a gain in the Atlanta Fed business inflation expectations to 2.0%, and the November housing market index to remain unchanged at 63.

Oil futures were also weighing on stock prices this morning as rising inventory levels trimmed Tuesday's impressive gains. Although prices spiked briefly after Russia's Energy Minister voiced his support for production limits, futures quickly retreated to the session lows, leaving Brent crude and West Texas Intermediate both down by at least 1% from Tuesday.

Stocks of dry bulk shipping companies were again posting stellar gains as investors continued to pour into the segment following last week's election. Expectations for increased fiscal stimulus to translate into economic growth has caused shares in the sector to defy gravity with Diana Containerships ( DCIX ) shares up 222% and Globus Maritime ( GLBS ) higher by 236%.

European stocks were also retreating with banking stocks taking the brunt of today's profit-taking pressure. Euro-zone banks, namely Portuguese, Italian and Spanish banks, were hit the hardest as investors ponder what impact President-elect Trump's fiscal policies will have on Europe, especially in those countries most vulnerable to political risks. Additionally, the possibility for the European Central Bank to expand its bond-buying program, and the subsequent impact on EU interest rates, is also weighing on the sector.

Crude oil was down $0.22 to $45.61 per barrel. Natural gas was up $0.03 to $2.91 per 1 million BTU. Gold was up $2.30 to $1,226.80 an ounce, while silver was down $0.12 to $16.93 an ounce. Copper was down $0.05 to $2.46 per pound.

Among energy ETFs, the United States Oil Fund was down 0.58% to $10.27 with the United States Natural Gas Fund was up 0.60% to $7.30. Among precious-metal funds, the Market Vectors Gold Miners ETF was down 2.07% to 21.58 while SPDR Gold Shares was up 0.02% to $117.15. The iShares Silver Trust was down 0.39% to $16.13.

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

US MARKETS

NYSE Composite Index was down 0.54% to 10,687.99

Dow Jones Industrial Index was down 96.39 points (-0.51%) to 18,827.22

S&P 500 was down 8.02 points (-0.36%) to 2,172.49

Nasdaq Composite Index was up 11.30 points (+0.24) to 5,288.04

GLOBAL SENTIMENT

FTSE 100 was down 43.02 points (-0.63%) to 6,749.72

DAX was down 71.27 points (-0.66%) to 10,663.87

CAC 40 was down 35.39 points (-0.78%) to 4,501.14

Nikkei 225 was up 194.06 points (+1.10%) to 17,862.21

Hang Seng Index was down 43.38 points (-0.19%) to 22,280.53

Shanghai China Composite Index was down 1.93 points (-0.06%) to 3,205.06

NYSE SECTOR INDICES

NYSE Energy Sector Index was down 110.21 (-1.02%) to 10,701.02

NYSE Financial Sector Index was down 65.70 points (-0.98%) to 6,621.96

NYSE Healthcare Sector Index was down 34.19 points (-0.29%) to 11,919.53

UPSIDE MOVERS

(+) DCIX (+204.56%) Shipping stocks continue to capitalize on policies that could be enacted by President-elect Trump

(+) STEM (+34.58%) Unveiled asset sale to Boco Silicon Valley

(+) TGT (+6.54%) Q3 results top Wall Street estimates

(+) JKS (+4.36%) Tops Q3 estimates

DOWNSIDE MOVERS

(-) PDLI (-19.35%) Announced $150 million senior note offering

(-) LNTH (-11.22%) Upsized public offering to 3.5 million from 3.0 million

(-) FLXN (-9.31%) Priced public offering of 3.6 million shares at 14% discount to Tuesday's closing price

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

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

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