U.S. Edge Lower, Extending Losses
13 June 2019 - 12:29AM
Dow Jones News
By Nathan Allen
U.S. stocks toed the flat line Wednesday, a day after snapping a
weeklong winning streak amid lingering trade tensions and questions
over the direction of Federal Reserve policy.
The Dow Jones Industrial Average edged up 21 points, or 0.1%, to
26072. The S&P 500 rose less than 0.1% while the
technology-heavy Nasdaq Composite dipped 0.2%.
Equity markets in the U.S. had risen sharply in the prior week
after Federal Reserve officials hinted that the central bank might
lower interest rates to offset the negative effects of trade
disputes. However, some analysts say markets may have overestimated
the likelihood of such a rate cut, given recent positive economic
data.
Ipek Ozkardeskaya, senior market analyst at London Capital
Group, said heightened expectations of a rate cut may now force the
Fed to act sooner than intended to avoid disappointing the market
and driving up stock-market volatility over the summer.
Weak inflation is likely to fuel further speculation over the
Fed cutting rates and may weigh on the dollar, some analysts have
said. Inflation pressures remained muted last month.
U.S. consumer prices inched up in May, held down by a decline in
energy prices. The consumer-price index, which measures what
Americans pay for household goods and services such as toys or
electricity, rose a seasonally adjusted 0.1% in May from the
previous month, the Labor Department said Wednesday. Excluding
volatile food and energy prices, costs were also up 0.1% on the
month.
In Wednesday's action, shares of energy companies weighed on the
S&P 500, with the sector losing nearly 1%. Shares of Dow
components Exxon Mobil and Chevron dipped 0.8% and 0.6%,
respectively.
The losses came as global oil benchmark Brent crude traded down
1.5% at $61.33 a barrel after data from the American Petroleum
Institute showed that U.S. crude stockpiles climbed more than
expected last week. The U.S. Energy Information Administration is
due to release its own report later Wednesday, which will likely
confirm the trend, according to Oanda senior market analyst Craig
Erlam.
"Estimates suggest we may see a slight drawdown but that's very
much at odds with the near-five million barrel build that API
reported," he said.
The yield on 10-year U.S. Treasurys slipped to 2.136% on
Wednesday from 2.140% on Tuesday. Bond yields move in the opposite
direction to prices.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, rose 0.2% while gold rose 0.4% to $1,336.40 an
ounce.
Elsewhere, the Stoxx Europe 600 fell 0.4%. In Asia, China's
Shanghai Stock Exchange dropped 0.6% and Japan's Nikkei 225 fell
0.4%.
Jessica Menton and Joanne Chiu contributed to this article.
(END) Dow Jones Newswires
June 12, 2019 10:14 ET (14:14 GMT)
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