Stocks fall in early trading as oil prices decline
WALL STREET: Major U.S. benchmarks ended slightly lower in quiet trading.
Dampening market sentiment further, oil fell below $49 a barrel, giving up part of August’s strong rally, as signs of rising supply outweighed hopes that producing nations will agree on steps to support prices.
Trading remained subdued, as it has been for most of the month, with many investors remaining on the sidelines until after Labor Day.
The Nasdaq gained 15.47 (+0.30 percent) to close at 5,260.08, while the S&P 500 finished at 2,186.90, up 4.26 (+0.20 percent) from its open. The Nasdaq composite climbed 0.4% and rose as high as 5275.74, an intraday record.
Biotech stocks received a boost from Pfizer’s $14 billion acquisition of cancer drug maker Medivation, which jumped almost 20 percent.
The S&P 500 index showed 19 new 52-week highs and no new lows, while the Nasdaq recorded 66 new highs and five new lows. Regeneron Pharmaceuticals, Vertex Pharmaceuticals and Alexion Pharmaceuticals all rose 3 percent or more.
About 5.3 billion shares changed hands in U.S. exchanges, compared with the 6.38 billion daily average over the last 20 sessions.
To prepare, investors have been dialing down bullish bets on gold ahead of Friday, said Peter Hug, global trading director at Kitco Metals.
The greenback was given a boost over the weekend when Fed Vice Chairman Stanley Fischer said the USA central bank was getting close to its employment and inflation targets, prompting speculation a rate hike could come next month.
“We’re so focused on what guidance we might or might not get on Friday that we’re really just drifting around in these ranges at the moment without any real direction”, said RBC Capital Markets currency strategist Adam Cole.
The implied gains follow lackluster action on Monday (http://www.marketwatch.com/story/dow-futures-tread-water-as-buyers-wont-jump-in-until-yellen-speaks-2016-08-22), when the mood turned cautious as oil prices tumbled. The drop in energy prices dragged down energy stocks, which lost roughly 1 percent, more than the rest of the market.
US government bond prices rose.
Zoe’s Kitchen Inc.(ZOES) slumped 16% after the fast-casual restaurant chain late Monday cut its guidance for the fiscal year (http://www.marketwatch.com/story/zoes-kitchen-shares-fall-as-guidance-is-cut-2016-08-22-184854647).
At this time, the USD/CAD pair increases 0.10% to 1.2925, having previously announced session peak at 1.2933.
Gold for December delivery was recently down 1.1% at $1,332.00 a troy ounce on the Comex division of the New York Mercantile Exchange, on track for its biggest one-day loss since August 5. The dollar rose to 100.43 yen from 100.24 yen. It rose against the euro to $1.1323 from $1.1324.