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Stock Market News for September 10, 2015

Benchmarks ended sharply lower on Wednesday after concerns about a potential interest rate hike following record job openings and slump in oil prices offset China's stimulus efforts. Moreover, decline in Apple's shares also weighed on the broader markets.

For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article

The Dow Jones Industrial Average (DJI) declined 1.5% or 239.11 points to close at 16,253.57. The Standard & Poor's 500 (S&P 500) dropped 1.4% to end the day at 1,942.04. The tech-laden Nasdaq Composite Index closed at 4,756.53, decreasing 1.2%. The fear-gauge CBOE Volatility Index (VIX) gained 5.3% to settle at 26.23. A total of about 7.2 billion shares were traded on Wednesday, lower than the month to date average of 7.4 billion. Declining stocks easily outpaced advancers on the NYSE. For 72% stocks that declined, 25% advanced.

According to the Labor Department, job openings climbed to 5.8 million in July, a new series high. The prior series high was 5.4 million achieved in May 2015. The series started from Dec 2000. Additionally, the rate of job openings went up to 3.9% in July, increasing from the 3.6% pace experienced in the preceding three months. Several industries including professional and business services, accommodation and food services, retail trade and nondurable goods manufacturing experienced a rise in job openings in July.

This report heightened uncertainty about when the Federal Reserve will hike rates. Fed has reiterated time and time again that its decisions will be data dependent. The job openings report comes on the heels of a highly anticipated nonfarm payrolls report which failed to provide clarity about a rate hike this month.

Amid this uncertainty, oil prices declined, dragging energy shares down. Oil prices fell after the Energy Information Administration (EIA) trimmed its WTI crude oil price projections for 2015 and 2016. For this year, the EIA expects WTI crude oil price to average $49.23 a barrel, less than its earlier forecast of $49.62. EIA also reduced WTI crude oil price for the next year to $53.67 a barrel, down from a previous forecast of $54.42.

The price of WTI crude oil slumped 4.1% to $44.15 per barrel on Wednesday. Additionally, price of Brent crude tanked 4.1% to $47.58 per barrel. The Energy Select Sector SPDR (XLE) declined 1.9%, the highest among the S&P 500 sectors. Dow components Exxon Mobil Corporation ( XOM ) and Chevron Corporation ( CVX ) dropped 2% and 2.5%, respectively. Other key stocks from the energy sector including Schlumberger Limited ( SLB ), ConocoPhillips ( COP ) and Kinder Morgan, Inc. ( KMI ) decreased 1.5%, 1.3% and 1.5%, respectively.

Separately, the Consumer Staples Select Sector SPDR ETF (XLP) dropped 1.6% and was the second biggest loser among the S&P 500 sectors. Key consumer staples stocks including The Procter & Gamble Company ( PG ), The Coca-Cola Company ( KO ), Wal-Mart Stores Inc. ( WMT ), Philip Morris International, Inc. ( PM ) and Pepsico, Inc. ( PEP ) decreased 2.1%, 1.5%, 1.9%, 1.9% and 1.7%, respectively. Overall, all 10 sectors of the S&P 500 ended in the red.

These developments overshadowed Chinese government's reassurances that it would work toward boosting its sluggish economy. China's Ministry of Finance said it will roll out "stronger proactive fiscal policy" to stimulate economic growth. The Ministry of Finance added that additional funds will be allocated to increase infrastructure spending. Also, tax reforms would be implemented and the pace of public-private partnerships will be increased. Separately, Japan's prime minister, Shinzo Abe pledged to trim corporate taxes to bolster economic growth.

Coming back to the domestic front, Apple Inc. ( AAPL ) unveiled a new version of Apple TV, new set of iPhones and business-oriented iPad Pro. However, shares of Apple fell 1.9% after these new products failed to impress investors. Decline in shares of Apple also had a negative on the broader markets.

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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.


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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