U.S. Stocks Edge Lower, Extending Losses
June 12 2019 - 11:26AM
Dow Jones News
By Jessica Menton and Nathan Allen
U.S. stocks extended their losses 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 slipped 27 points, or 0.1%, to
26022. The S&P 500 lost 0.2% while the technology-heavy Nasdaq
Composite fell 0.5%.
U.S. equity markets have eased over the past two sessions after
rising sharply the prior week after Federal Reserve officials
hinted that the central bank might lower interest rates at its
meeting next week to offset the negative effects of trade
disputes.
"Stocks are likely pulling back due to profit-taking as
investors look ahead to what the Fed is going to do next week,"
said Ed Cofrancesco, chief executive of International Assets
Advisory LLC, an Orlando, Fla.-based brokerage firm. "Last week's
jobs report wasn't as strong as we would have liked, but that
justifies the Fed possibly cutting rates. The U.S. economy,
however, continues to be strong."
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 1%. Shares of Dow components
Exxon Mobil and Chevron lost 0.7% and 0.9%, 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 Energy Information Administration, meanwhile, reported
Wednesday that U.S. crude supplies climbed by 2.2 million barrels
for the week ended June 7, a second weekly gain in a row.
The yield on 10-year U.S. Treasurys fell to 2.119% 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, was flat while gold rose 0.4% to $1,336.20 an
ounce.
Elsewhere, the Stoxx Europe 600 fell 0.3%. In Asia, China's
Shanghai Stock Exchange dropped 0.6% and Japan's Nikkei 225 fell
0.4%.
Joanne Chiu contributed to this article.
Write to Jessica Menton at Jessica.Menton@wsj.com
(END) Dow Jones Newswires
June 12, 2019 11:11 ET (15:11 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.