por admin » Jue Sep 29, 2016 11:51 am
Dow drops 100 points; utilities off 1.5%
Fred Imbert | @foimbert
3 Mins Ago
CNBC.com
Pisani: Lot of OPEC skepticism out there
U.S. stocks traded lower on Thursday the initial excitement from an OPEC production cut deal faded while investors digested several pieces of economic data.
"For all intents and purposes, the OPEC meeting was all rhetoric and no action," said Adam Sarhan, CEO at Sarhan Capital. "Remember, these countries do not like each other."
"The initial reaction, particularly in energy stocks, was too much too fast," he said. "We're in a situation where the market is looking for direction, ... and earnings season is right around the corner."
The S&P 500 fell 0.2 percent, with utilities falling more than 1.5 percent to lead decliners. The Dow Jones industrial average fell approximately 40 points, with Procter & Gamble contributing the most losses. The Nasdaq composite lagged, falling 0.4 percent as Apple and the iShares Nasdaq Biotechnology ETF (IBB) both dropped more than 1 percent.
"I think think it's a combination of [OPEC] and the data we got this morning. I'm not saying it was surprisingly good, but it was good and that puts a rate hike squarely on the table," said Maris Ogg, president at Tower Bridge Advisors.
OPEC, the 14-country oil cartel, reached a deal to cut production starting in November. U.S. crude prices soared after the deal was reported, settling more than 5 percent higher. U.S. oil traded 1.9 percent higher at $47.95 per barrel in midday ET.
"I do not foresee Wednesday's news as the catalyst that sends the broader indices out of their tortuous range from the past three months. Member states have a history of cheating their quotas to limit any potential gains," said Jeremy Klein, chief market strategist at FBN Securities. "The geopolitical tensions among those sitting down in Algiers may also force a termination of the agreement prior to or soon after its implementation."
NYSE trader on the floor
Andrew Burton | Getty Images
NYSE trader on the floor
The surge in oil lifted stocks, with the three major U.S. indexes closing higher. U.S. futures slipped Thursday, with S&P and Nasdaq futures falling 3 points and 8 points, respectively, while Dow futures dropped 30 points.
"We have a market that's looking at three things. First, we have some stabilization in oil prices. Second, we now have a netter idea of what the Fed wants to do and, lastly, we have an election that the market has to pay more attention to," said Art Hogan, chief market strategist at Wunderlich Securities.
"Those three things are working in concert, and one of those is going to have more pull than the others on any given day, but today we're at equilibrium," he said.
In economic news, the third — and final — read on second-quarter GDP showed the U.S. economy grew slightly faster than previously estimated. The Commerce Department said GDP rose at an annualized rate of 1.4 percent in the second quarter.
Meanwhile, weekly jobless claims rose 3,000 to 254,000, slightly less than expected. The four-week moving average of new claims, which smoothes out volatility, fell 2,250 to 256,000.
"At this point in the economic cycle, most of the influx into the labor force are young people or those being pulled off the couch with attractive wages. This low level of claims is not inconsistent with a slowing pace of job hiring's," said Peter Boockvar, chief market analyst at The Lindsey Group.
The government also reported that after-tax corporate profits fell at a 0.6 percent rate in the second quarter, a smaller drop than initially estimated. With profits declining, an alternative measure of growth, gross domestic income, or GDI, dropped at a 0.2 percent rate in the second quarter. GDI measures the economy's performance from the income side.
Pending home sales fell 2.4 percent in August, marking the third straight monthly decline, the National Association of Realtors said.
In corporate news, PepsiCo shares rose about 1 percent after the soda and snacks giant posted better-than-expected quarterly results. ConAgra and Accenture shares also rose following their quarterly results releases. After the bell, Costco is scheduled to post results.