Midday Update: Stocks Turn Lower After Oil Prices Give Up Early Gains
Stocks were drifting deeper into the red Wednesday afternoon after oil and copper gave up their early gains and the biotech sector came under fresh selling pressure. The morning strength in commodity prices helped offset disappointing U.S. manufacturing data, buoying Wall Street heading into Wednesday's open before oil capitulated to selling pressure above $47.00 per barrel.
The major indices opened cautiously higher despite new worries over China's manufacturing sector, with the Caixin production index falling to its lowest level in six and a half years as well as additional concerns about the ailing economies in Brazil and Canada. U.S. manufacturing data was almost equally disappointing, with the September flash PMI reading staying unchanged at 53.0, missing estimates for a small improvement to 53.1.
European equities, however, bucked the global trend and closed marginally higher on dovish comments from European Central Bank President Mario Draghi. During testimony to the European Union parliament, Draghi warned of more downside risks to the EU economy, suggesting that the central bank could extend the size or duration of QE if warranted. Near the close, Europe's bourses got another shot-in-the arm when Volkswagen CEO Martin Winterkorn announced his resignation in the wake of the falsified emissions scandal at the German automaker.
Crude oil was down 62 cents to $45.74 per barrel. Natural gas was up a penny to $2.65 per 1 million BTU. Gold was up $6 to $1,130.80 per ounce, while silver was up 5 cents to $14.81 per ounce. Copper was unchanged at $2.30 per pound.
Among energy ETFs, the United States Oil Fund was down 2.15% to $14.60 with the United States Natural Gas Fund was down 0.08% to $12.11. Among precious-metal funds, the Market Vectors Gold Miners ETF was down 0.52% to 13.29 while SPDR Gold Shares was up 0.56% to $108.39. The iShares Silver Trust was up 0.02% to $14.15.
Here's where the U.S. markets stood at mid-day:
NYSE Composite Index down 57.87 (-0.58%) to 9,854.74
Dow Jones Industrial Average down 104.43 (-0.64%) to 16,226.04
S&P 500 down 8.53 (-0.44%) to 1,934.21
Nasdaq Composite Index down 12.99 (-0.27%) to 4,743.73
Nikkei 225 Index closed
Hang Seng Index down 2.26%
Shanghai China Composite Index down 2.19%
FTSE 100 Index up 1.62%
CAC 40 up 0.10%
DAX up 0.44%
NYSE SECTOR INDICES
NYSE Energy Sector Index down 0.97%
NYSE Financial Sector Index down 0.48%
NYSE Healthcare Sector Index down 0.03%
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