By Caroline Valetkevitch
U.S. stocks dipped Thursday afternoon as another drop in oil prices weighed on energy shares while financial shares pared some of their early gains.The S&P 500 energy index .SPNY was down 0.5 percent. Crude prices slid nearly 2 percent, extending the previous session's dive that brought prices to the lowest levels this year.The S&P 500 financial index .SPSY, which had led earlier in the day, cut gains and was last up just 0.2 percent.When asked during a briefing whether President Donald Trump still backs his campaign pledge to restore the Glass-Steagall Act, White House spokesman Sean Spicer said that he did. The law, which separated commercial and investment banking, was repealed in 1999 and, if reinstated, would mainly apply to larger banks."Financials have been a massive leadership group, and a lot of it has been built on deregulation" promises, said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
"Maybe the sector has gotten ahead of itself," he said, adding that more details are needed from the new administration.Helping the market earlier was a report that showed the number of Americans applying for unemployment benefits rose to 243,000 last week, but remained below 300,000 for the 105th week.Alongside an improving labour market is an uptick in inflation that has prompted hawkish rhetoric from several Fed officials, leading traders to price in a near 90-percent chance of a quarter point rate increase next week.
Friday's nonfarm payrolls report is expected to show 190,000 jobs were added in the U.S. private and public sectors in February.Some investors think the jobs report could bolster already sky-high odds of a rate hike next week.A frenetic post-election rally on bets of reduced regulation and tax cuts under President Donald Trump has been losing steam as investors fret over valuations and the possibility of Fed raising rates more aggressively.
The Dow Jones Industrial Average .DJI was down 45.6 points, or 0.22 percent, to 20,810.13, the S&P 500 .SPX had lost 4.09 points, or 0.17 percent, to 2,358.89 and the Nasdaq Composite .IXIC had dropped 12.87 points, or 0.22 percent, to 5,824.68.Meanwhile, the European Central Bank stood firm on its stimulus program but said there was no longer a sense of urgency in taking further action to counter deflation.Johnson & Johnson (JNJ.N) was up 1.7 percent after Jefferies raised its price target on the healthcare conglomerate's stock. Apple (AAPL.O) was the top drag on the S&P and the Nasdaq, slipping 0.4 percent on chatter that iPhone 8 launch could be delayed. (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski)
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Updated Date: Mar 10, 2017 02:16:14 IST