By Yashaswini Swamynathan
Wall Street was slightly lower on Wednesday as a drop in oil prices weighed on energy stocks, while weak economic data took a toll on bank shares ahead of a widely expected interest rate hike by the Federal Reserve. Oil prices fell to their lowest in more than five weeks after data showed a surprise buildup in U.S. gasoline inventories and a report from the International Energy Agency (IEA) projected an increase in non-OPEC production. [O/R]The SP 500 energy sector .SPNY sank 2.4 percent, led by declines in Exxon (XOM.N) and Chevron (CVX.N). Financials .SPSY fell 1.3 percent after weaker-than-expected retail sales and consumer prices data raised questions about the Fed’s ability to further tighten monetary policy. While traders continued to see a more than 93 percent chance for the Fed to raise rates at the end of the two-day meeting on Wednesday, they dialled back the odds of a third hike this year.”With the weak data, you start to wonder why the Fed is so bent on raising rate. It seems they should be doing the opposite,” said Robert Pavlik, chief market strategist at Boston Private Wealth.
The Fed meeting could also provide details on the central bank’s plans to trim its $4.5 trillion balance sheet. “In my view there’s no question that we’ll get a rate hike at 2 p.m.” said Frances Donald, senior economist at Manulife Asset Management in Toronto. “What matters most in today’s statement is how the Fed signals the next rate hike and perhaps, even more critically, the reduction in the balance sheet.”
At 12:25 p.m. ET (1625 GMT), the Dow Jones Industrial Average .DJI was up 6.72 points, or 0.03 percent, at 21,335.19. The index had hit an all-time high of 21,354.56 earlier in the session. The SP 500 .SPX was down 2.85 points, or 0.11 percent, at 2,437.5 and the Nasdaq Composite .IXIC was down 3.37 points, or 0.05 percent, at 6,217.00.Gains in defensive sectors like consumer staples .SPLRCS and utilities .SPLRCU helped contain losses on the indexes.
Johnson Johnson (JNJ.N) rose 0.8 percent to $133.14 after the company’s flu drug succeeded in a mid-stage trial.Alexion (ALXN.O) was up 8.4 percent at $117.23 after the biotechnology company named Biogen’s (BIIB.O) Chief Financial Officer Paul Clancy as its CFO. Biogen’s stock was down 3.4 percent.HR Block (HRB.N) was the biggest percentage gainer on the SP 500, rising 9.3 percent to $29.50 after the tax preparation service provider’s fourth-quarter revenue and profit beat analysts’ expectations.Declining issues outnumbered advancers on the NYSE by 1,563 to 1,330. On the Nasdaq, 1,604 issues fell and 1,169 advanced. (Reporting by Yashaswini Swamynathan in Bengaluru, additional reporting by Sinead Carew in New York; Editing by Anil D’Silva)
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