Wall Street pares losses as oil rally boosts energy stocks | Reuters - Firstpost
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Wall Street pares losses as oil rally boosts energy stocks | Reuters

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U.S. stocks pared some of their losses in early afternoon trading on Wednesday as energy and materials stocks rose, driven by a 6 percent rally in crude oil prices.

Oil rose after investors took advantage of an earlier weakness in prices and a drop in the U.S. dollar. [O/R]

DuPont's was up 3 percent and was the biggest boost to the S&P materials index, while Exxon's 2.4 percent rise lifted the energy index.

Earlier in the day, stocks fell after U.S. data showed that the economy's service sector expanded at a slower-than-expected rate, raising concerns that weakness in manufacturing was spreading to other areas of the economy.

But, ADP data showed private employers added more jobs than expected in January. The data comes ahead of the government's more comprehensive employment report on Friday.

Tepid U.S. growth, falling oil prices, and fears regarding a China-led global slowdown have been major factors for a torrid start to the year for stocks. The S&P 500 is down 6.9 percent this year.

But, more than most, the ebb and flow of crude oil prices has affected the stock market the most, even as investors wait for central banks around the world to step in to boost the economy.

Fed fund futures are pricing in the Federal Reserve to now hike rates only once this year, down for the four increases projected earlier. The Fed next policy meeting is in March.

"I think the next couple of quarters could be really volatile," said Bryce Doty, portfolio manager at Sit Investment Associates.

"You need the markets to settle into a new equilibrium without this manipulated support from the Fed, which means a correction. The problem with corrections is that markets tend to over correct before they rebound."

At 12:30 p.m. ET (1730 GMT), the Dow Jones industrial average was down 8.53 points, or 0.05 percent, at 16,145.01.

The S&P 500 was down 11.12 points, or 0.58 percent, at 1,891.91 and the Nasdaq Composite index was down 48.64 points, or 1.08 percent, at 4,468.31.

Five of the 10 major S&P sectors were lower with the financial index's 1.5 percent loss leading the decliners.

The index fell to a more than two-year low, with Wells Fargo's 3.2 percent fall weighing the most.

Microsoft was down 2.2 percent at $51.83, making its the biggest drag on the S&P and the Nasdaq. UnitedHealth' 2.2 percent fall weighed the most on the Dow.

Weak quarterly earnings by U.S. corporations are adding to worries. Fourth-quarter S&P 500 earnings are expected to have fallen 4.4 percent from a year earlier, according to Thomson Reuters data.

Comcast rose 4.3 percent to $56.91 after the company posted better-than-expected revenue.

National Oilwell fell 11.3 percent to $27.20 after the largest U.S. oilfield equipment provider reported a quarterly loss.

Advancing issues outnumbered decliners on the NYSE by 1,533 to 1,415. On the Nasdaq, 1,602 issues fell and 1,057 advanced.

The S&P 500 index showed 17 new 52-week highs and 56 new lows, while the Nasdaq recorded 13 new highs and 203 new lows.

(Reporting by Tanya Agrawal; Additional reporting by Abhiram Nandakumar; Editing by Don Sebastian and Savio D'Souza)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Feb 4, 2016 00:00 IST

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