Dow’s winning run ends as energy falls
THE Dow industrials six-day winning streak came to a halt yesterday as a drop in oil prices pulled energy stocks lower and a guarded outlook from Wal-Mart fanned worries about consumer spending.
Stocks were also undermined by a US dollar rally, as its safe-haven appeal rose after several policymakers around the world warned the economic recovery was fragile.
With earnings season coming to a close, and looking beyond the Federal Reserve’s meeting last week, investors searched for new catalysts to determine the market’s direction.
“As the S&P 500 has gone above 1,100, it has had a hard time holding on to gains,” said Quincy Krosby, market strategist at Prudential Financial in Shelton, Connecticut.
Both the Dow industrials and the S&P 500 hit 13-month closing highs on Wednesday.
Oil futures settled down 3 per cent below $77 per barrel as data confirmed crude and refined product inventories rose last week. The S&P energy sector index fell 2 per cent, with shares of Hess Corp down 2.5 per cent to $55.95 and Occidental Petroleum Corp down 1.6 per cent to $81.81.
The Dow Jones industrial average fell 93.79 points, or 0.91 per cent, to 10,197.47. The Standard & Poor’s 500 Index dropped 11.27 points, or 1.03 per cent, to 1,087.24. The Nasdaq Composite Index lost 17.88 points, or 0.83 per cent, to 2,149.02.
“In order to get to the next level up, (the market) does need a strong catalyst, and most of the time the stronger dollar has been a negative,” Krosby said.
Shares of insurers and banks were among top laggards, with the S&P financial sector index down 1.8 per cent.
Wal-Mart, the world’s largest retailer, reported a higher quarterly profit and its shares rose 0.5 per cent to $53.24, but it forecast earnings for the key holiday quarter that could miss Wall Street’s consensus estimate.
Concern about consumer spending weighed on the S&P retail index, which fell 0.8 per cent.
After the market’s close, shares of Walt Disney Co jumped 3.6 per cent to $30.10 after the media company posted a rise in quarterly earnings and its revenue was higher than expected.