Wall Street pulled lower by GE, energy shares
14 Nov, 2017
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(Reuters) – U.S. stock indexes were lower on Tuesday after GE shares plunged for the second straight day and a drop in oil prices hit energy stocks.
The industrial conglomerate was on track to record its worst two-day fall since 2009 after its new chief executive on Monday outlined steps to turn it into a smaller, more focused company, surprising some investors.
Oil prices dipped more than 2 percent as bullish factors such as ongoing OPEC-led production cuts and Middle East tensions were countered by rising U.S. output. [O/R]
Exxon slipped 0.7 percent and ConocoPhillips was down 2.5 percent, weighing the most on the S&P energy index.
With the quarterly earnings season winding down, the market has taken a breather after its rally to record highs last week.
“There are no catalysts at the moment, while there are concerns that the Federal Reserve is going to get more ammunition to move higher with interest rates,” said Jeff Zipper, managing director for investments at Private Client Reserve at U.S. Bank in Palm Beach, Florida.
“Flattening yield curve is certainly a concern for the market. The market is not convinced that we’re going to get the growth that we need to steepen the yield curve.”
A tightening gap between short- and long-term U.S. government bond yields suggests the Fed may be in danger of hiking rates too much and killing longer term inflation and growth.
The White House is considering Mohammed El-Erian, chief economic adviser at German insurance giant Allianz, to be the Fed vice chair, the Wall Street Journal reported. A White House spokesperson declined to comment on the report.
At 12:25 p.m. ET (1625 GMT), the Dow Jones Industrial Average was down 38.46 points, or 0.16 percent, at 23,401.24, the S&P 500 was down 6.06 points, or 0.23 percent, at 2,578.78 and the Nasdaq Composite was down 22.21 points, or 0.33 percent, at 6,735.39.
Nine of the 11 major S&P sectors were lower, led by losses in energy and materials index.
Metal prices pulled back after a weaker-than-expected economic data from China sparked concerns about demand.
Copper miner Freeport-McMoRan slipped 5.5 percent, and was the biggest loser on the materials index.
Shares in Home Depot held steady, while those in off-price retailer TJX dipped after quarterly reports that bore the impact of a violent U.S. hurricane season.
Advance Auto Parts soared 20 percent after the auto parts retailer affirmed full-year profit forecast and beat quarterly profit estimates.
Declining issues outnumbered advancers on the NYSE by 1,775 to 1,054. On the Nasdaq, 1,736 issues fell and 1,068 advanced.
Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva
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