ARNC Arconic Corporation

By Barbara Kollmeyer, MarketWatch

Energy stocks tumble, pressured by oil prices

U.S. stocks edged slightly higher on Wednesday as investors digested a sharp decline in the previous session, sparked by a weak start to the corporate earnings season, and looked ahead to the latest minutes from the Federal Reserve for potential clarity on interest rates.

Minutes from the Federal Open Market Committee's September meeting are due for release at 2 p.m. Eastern Time, and market participants will scour them for any insight about the Fed's interest rate policies. Currently, many expect the U.S. central bank to raise rates at its December meeting. That expectation has lifted the U.S. dollar of late, which has been a drag on stocks with multinational exposure.

"The FOMC minutes will be the most exciting thing that happens today, in terms of input, but we still have to deal with a lackluster start to the earnings season, a stronger dollar, and weakness in commodities," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Ahead of the release of the minutes, New York Fed President Bill Dudley told CNBC that U.S. inflation expectations appeared to be "well-anchored," and that "slack" in the labor market was a reason the central bank hasn't been more aggressive in raising interest rates.

Tuesday's session was the harshest day of selling in weeks, with equities hit by a weak quarterly report (http://www.marketwatch.com/story/losses-on-tap-for-wall-street-stocks-as-oil-backs-away-from-highs-2016-10-11) from Alcoa Inc. (AA) The former Dow component, which is seen as the unofficial start to the season, reported results that were below expectations. Major indexes dropped more than 1% on Tuesday, their weakest session since early September.

Read: S&P 500's 'triangle' chart pattern is warning of a big selloff, analysts says (http://www.marketwatch.com/story/sp-500s-triangle-chart-pattern-warns-of-a-big-selloff-analyst-says-2016-10-10)

Corporate earnings are expected to drop this quarter, making for a sixth straight quarter of declines (http://www.marketwatch.com/story/5-things-to-expect-this-earnings-season-2016-10-07), according to FactSet data. While sales are expected to rebound, breaking their own six-quarter streak of weakness, that may not reassure investors about the state of American corporations at a time when stock indexes are near record levels. At current levels, the S&P 500 is 2.7% below an intraday record hit in August.

The Dow Jones Industrial Average rose 0.1%, or 14 points, to 18,142, while the S&P 500 rose 0.1% to 2,140 and the Nasdaq Composite Index was unchanged at 5,248.

Energy stocks were by far the weakest sector on Wednesday, with the S&P Energy sector down 1.1%. The group was pressured as crude oil fell 1.4%, hurt by heightened uncertainty over Russia's willingness (http://www.marketwatch.com/story/oil-prices-rise-but-doubts-grow-over-russias-deal-commitment-2016-10-12) to cut production. Many analyst view output cuts as necessary to address oversupply in the oil market, especially amid weak global demand.

"The question investors need to ask is whether oil can hold on to some of its recent gains, or whether it will continue to put pressure on the energy complex, which is an important part of the over S&P," Hogan said.

In corporate news, Amazon.com Inc. (AMZN) plans to introduce convenience stores and curbside pickup locations (http://www.marketwatch.com/story/amazon-to-add-to-grocery-business-with-convenience-stores-curbside-pickup-2016-10-11) as it pushes deeper into the grocery business. The move puts the online retailer in competition with Wal-Mart Stores Inc.(WMT)(WMT), The Wall Street Journal reported. Shares of Amazon rose 0.4% to $834.37.

Samsung Electronics Co.(005930.SE) slashed its operating profit forecast (http://www.marketwatch.com/story/samsung-cuts-profit-view-by-a-third-in-wake-of-galaxy-note-7-recall-2016-10-12) for the third quarter to 5.2 trillion Korean won ($4.6 billion) from an original estimate of 7.8 trillion won, in the wake of a recall and production halt of its Galaxy 7 Note smartphone. Apple Inc. (AAPL) rose 0.7% to $117.17 amid speculation by analysts that the iPhone maker could sell millions of phones on the back of Samsung's troubles (http://www.marketwatch.com/story/apple-could-sell-another-15-million-iphones-because-of-samsungs-note-7-explosions-2016-10-10). The stock is poised for its longest winning streak since a seven-day run in February 2015. Shares are up 3.6% this month

Read:Why Samsung's exploding-phone nightmare should terrify Apple (http://www.marketwatch.com/story/why-samsungs-exploding-phone-nightmare-should-terrify-apple-2016-10-11)

In other markets, Europe's stock market fell 0.3% while the FTSE 100 index slipped (http://www.marketwatch.com/story/rising-pound-losses-for-miners-send-ftse-100-lower-2016-10-12) 0.4% as sterling continued its recent weakness.

Gold prices edged higher, up 0.1% on the day.

(END) Dow Jones Newswires

October 12, 2016 10:30 ET (14:30 GMT)

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