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03/23/2016

Stocks slip, led by energy and materials companies

In this Oct. 2, 2014, file photo, Wall Street is etched in the facade of a building in New York's Financial District. Stocks are opening broadly lower Wednesday, March 23, 2016, led by declines in mining companies as prices for metals and other commodities weaken. Several companies were also moving lower Wednesday after reporting disappointing results or outlook.

In this Oct. 2, 2014, file photo, Wall Street is etched in the facade of a building in New York's Financial District. Stocks are opening broadly lower Wednesday, March 23, 2016, led by declines in mining companies as prices for metals and other commodities weaken. Several companies were also moving lower Wednesday after reporting disappointing results or outlook.

 

Falling prices for oil and other commodities pulled U.S. stocks modestly lower on Wednesday, nudging the Standard & Poor's 500 index slightly into the red for the year and putting it on course to snap a five-week winning streak.

 

Energy and mining companies led the decline, while consumer staples and utilities stocks bucked the broader downward trend.

 

Disappointing earnings from several companies, including Nike, also weighed on the market. Oil slumped 4 per cent.

 

Trading was muted ahead of Friday, when markets will be closed for the Good Friday holiday.

 

"It's one of the lowest volume days of the year," said Erik Davidson, chief investment officer for Wells Fargo Private Bank. "We're seeing a little bit of a sell-off, but not much."

 

Investors can expect similarly low trading volume on Thursday.

 

The Dow Jones industrial average fell 79.98 points, or 0.5 per cent, to 17,502.59. The S&P 500 index lost 13.09 points, or 0.6 per cent, to 2,036.71. The Nasdaq composite dropped 52.80 points, or 1.1 per cent, to 4,768.86.

 

The Dow is now up 0.5 per cent for the year, while the S&P 500 is down 0.4 per cent and the Nasdaq is off 4.8 per cent.

 

Major U.S. indexes moved lower early on as falling prices for oil, natural gas, precious metals and other commodities put traders in a selling mood.

 

Chesapeake Energy lost 69 cents, or 14.3 per cent, to $4.13, while Marathon Oil fell $1.12, or 9.9 per cent, to $10.19. Southwestern Energy slid 73 cents, or 9 per cent, to $7.35.

 

Mining companies also slumped, including Newmont Mining, which fell $2.41, or 8.8 per cent, to $24.98, while Freeport-McMoRan lost $1.24, or 11.28 per cent, to $9.75.

 

A batch of company earnings also gave investors reasons to sell.

 

Nike, one of the 30 stocks in the Dow, fell 3.8 per cent after reporting revenue that fell far short of what analysts were expecting. The athletic apparel maker also gave a weaker-than-anticipated outlook for 2016. The stock dropped $2.46 to $62.44.

 

Krispy Kreme Doughnuts slid 7.1 per cent after the chain reported disappointing fourth-quarter revenue and a weaker-than-expected annual profit forecast. The stock shed $1.09 to $14.29.

 

Software maker Red Hat also declined, losing 4.2 per cent after it reported disappointing forecasts. The stock fell $3.38 to $72.33.

 

Most homebuilders slumped after the Commerce Department reported that new-home sales rose only 2 per cent in February to a seasonally adjusted annual rate of 512,000. Sales in the opening two months of 2016 are running slightly below last year's pace. Beazer Homes USA fell the most, sliding 63 cents, or 7.2 per cent, to $8.07.

 

All told, eight of the 10 sectors in the S&P 500 index lost ground, with energy stocks sliding the most, 2.1 per cent. The sector is down about 18 per cent over the past 12 months. Utilities and consumer staples stocks moved higher.

 

Not all companies got caught up in the broad decline.

 

Pepco Holdings vaulted $5.69, or 26.8 per cent, to $26.93 after a Washington D.C. regulator approved Pepco's $7 billion sale to rival utility Exelon. The deal will only go through if Exelon agrees to the regulator's terms, however. Exelon slipped 28 cents, or less than 1 per cent, to $34.72.

 

European stocks were mixed following Tuesday's deadly bombings in Belgium.

 

Germany's DAX rose 0.3 per cent, while France's CAC 40 fell 0.2 per cent. Britain's FTSE 100 edged up 0.1 per cent. Belgium's main index increased 0.1 per cent.

 

In Asia, markets mostly fell moderately. Japan's benchmark Nikkei 225 fell 0.3 per cent. South Korea's Kospi edged 0.1 per cent lower. Hong Kong's Hang Seng fell 0.3 per cent. Australia's S&P/ASX 200 lost 0.5 per cent.

 

In energy trading, benchmark U.S. crude fell $1.66, or 4 per cent, to close at $39.79 a barrel in New York. Brent crude, the benchmark for international oils, slid $1.32, or 3.2 per cent, to close at $40.47 a barrel in London.

 

Wholesale gasoline fell 4 cents, or 2.9 per cent, to close at $1.45 a gallon, while heating oil slipped 5 cents, or 3.8 per cent, to close at $1.20 a gallon. Natural gas declined 7 cents, or 3.7 per cent, to close at $1.79 per 1,000 cubic feet.

 

Among metals, gold fell $24.60, or 2 per cent, to $1,224.40 an ounce. Silver slid 61 cents, or 3.9 per cent, to $15.27 an ounce. Copper lost 5 cents, or 2.4 per cent, to $2.24 a pound.

 

Bond prices rose. The yield on the 10-year Treasury note fell to 1.87 per cent from 1.94 per cent late Tuesday. The euro fell slightly to $1.1183 from $1.1216, while the dollar rose to 112.39 yen from 112.33 yen.



    Editor:Albert | Source: The Associated Press


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