Wall Street declines as oil prices drop; Fed in focus

US stocks on Tuesday were trading in positive territory, but off their best levels of the session, as upbeat data on the sale of new homes in the USA and a report on manufacturing in Europe supported buying appetite on Wall Street.

Pfizer’s $14 billion acquisition of cancer drug maker Medivation propped up biotech stocks. The S&P 500 index rose 8 points, or 0.4%, to 2,191, the Dow Jones Industrial Average climbed 85 points, or 0.5%, at 18,617, while the Nasdaq Composite Index added 20 points, or 0.4%, to 5,265. Eastern. The Standard & Poor’s 500 index lost a point, or 0.03 percent, to 2,183 and the Nasdaq composite rose three points, or 0.1 percent, to 5,242. The S&P 500 shed 1.23 points, or less than 0.1%, to finish at 2,182.64.

In her planned speech in Jackson Hole, Yellen could signal that the Fed is ready to raise interest rates as soon as next month. In other deal news, ChemChina said Monday that a US national-security regulator had cleared its planned $43 billion acquisition of Swiss seed company Syngenta.

USA government bond prices rose.

In Asia, markets were mixed on Tuesday morning, with Japanese shares edging down as the yen inched closer to the key 100 level against the dollar.

Gold fell $2.80 to $1,343.40 an ounce, silver fell 45 cents to $19 an ounce and copper fell 3 cents to $2.15 a pound.

The case for a rate hike was bolstered by Fed Vice Chairman Stanley Fischer’s comments that the USA economy was close to hitting the Fed’s job and inflation targets. He emphasized that longer term, the model doesn’t show any “real vulnerability” until mid- or late-September “as the equity markets transition from an interest-rate-driven bull market to an earnings-driven bull market”.

Voya’s Cavanaugh is also skeptical of a rate hike, even in December.

Oil prices, lower earlier in the session, swung to gains after Reuters reported that Iran is indicating it may support action to prop up the oil market.

West Texas Intermediate crude oil on Tuesday was rising 0.5% to $47.67 a barrel on Tuesday.

Declining issues outnumbered advancing ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.00-to-1 ratio favored decliners. It was the fastest monthly increase since October 2007.

Bond prices rose. The yield on the 10-year Treasury note fell to 1.55 per cent.

Tomorrow’s economic data will be limited to the New Home Sales Report for July (consensus 580k), which will be released at 10:00 ET.