By Anora Mahmudova and Victor Reklaitis, MarketWatch
Yellen testifies in front of House Financial Services
Committee
U.S. stocks drifted lower Wednesday as cautious investors were
reluctant to make big bets amid uncertainty surrounding the fate of
troubled Deutsche Bank and volatile oil prices.
Investors are also watching Federal Reserve Chairwoman Janet
Yellen's testimony before the House Financial Services Committee on
regulation and supervision as well as speeches from several Fed
officials.
The S&P 500 was down 4 points, or 0.2%, at 2,155, with
nearly all main sectors trading lower. Telecoms and utilities were
leading decliners, down about 1%, while energy shares were
following oil prices, giving up earlier gains.
"After a bounce on Tuesday, which was mostly due to a technical
rally after three days of selling, markets do not have any positive
or overly negative news to react to," said Michael Antonelli,
equity sales trader at Robert W. Baird & Co.
The Dow Jones Industrial Average was off 19 points, or 0.1%, to
18,209 with Nike Inc. (NKE) leading losses, down 2.1%.
The Nasdaq Composite Index declined 10 points, or 0.2%, to
5,395.
"The market has been slowly grinding higher [over the past year]
primarily because investors have nowhere else to turn," said Kim
Caughey Forrest, senior analyst and portfolio manager at Fort Pitt
Capital Group.
Forrest noted that investors are cognizant of what's going on
with oil prices as well as Deutsche Bank concerns.
"Oil prices continue to trade around $40-$45 a barrel when by
now experts told us it would be around $60. This means that
earnings of energy companies will continue to struggle in the third
quarter," Forrest said.
According to FactSet, the estimated earnings decline for the
S&P 500 in the third quarter is 2.3%, largely dragged down by
drop in earnings in the energy sector.
Oil meeting:Crude-oil prices
(http://www.marketwatch.com/story/crude-higher-but-market-faces-long-wait-for-next-opec-move-on-output-2016-09-28)
gave up earlier gains and turned negative to trade at $44.66 as
energy traders watched for headlines from a meeting of the
Organization of the Petroleum Exporting Countries that is expected
to end with no deal to freeze output.
Read:Why China is the oil 'wild card' that could overrule any
OPEC moves
(http://www.marketwatch.com/story/why-china-is-the-wild-card-that-could-overrule-any-opec-moves-2016-09-27)
Meanwhile, Deutsche Bank AG's U.S.-listed shares
(DBK.XE)(DBK.XE) trimmed earlier gains to trade 0.8% higher
following news the troubled German lender is selling an insurance
business
(http://www.marketwatch.com/story/european-stocks-erase-monthly-loss-as-oil-firms-deutsche-bank-rally-2016-09-28),
as the country's government denied a report it is readying a rescue
plan for the bank
(http://www.marketwatch.com/story/german-government-preparing-rescue-plan-for-deutsche-bank-report-2016-09-28).
See:Deutsche Bank's woes not a Lehman moment, says UBS chairman
(http://www.marketwatch.com/story/deutsche-banks-woes-not-a-lehman-moment-says-ubs-chairman-axel-weber-2016-09-28)
The Fed front: St. Louis Fed President Jim Bullard is expected
to deliver opening remarks at the St. Louis Fed's conference on
community banking at 10:15 a.m. Eastern. Chicago Fed President
Charles Evans is slated to speak at 1:30 p.m. Eastern about the
economy at that same confab.
Cleveland Fed President Loretta Mester is expected to make
remarks on the economic outlook and monetary policy at a forum in
the Cleveland area at 4:35 p.m. Eastern.
Kansas City Fed President Esther George will give a speech at
the Forum for Minority Bankers, speaking about the economy,
payments system and leadership strategies.
In other economic news, orders for durable or long-lasting goods
flattened out in August
(http://www.marketwatch.com/story/durable-goods-orders-lose-steam-in-august-2016-09-28)after
a sizable gain in the prior month, pointing to ongoing difficulties
for American manufacturers.
Check out:
Other markets: European stocks climbed, while Asian markets
closed mostly lower
(http://www.marketwatch.com/story/nikkei-leads-asia-lower-on-bank-losses-yen-strength-2016-09-28).
Gold futures inched down, and a key dollar index edged up.
Corporate news: Shares in Tempur Sealy International Inc.(TPX)
dived 23% after the mattress company lowered its 2016 guidance late
Tuesday
(http://www.marketwatch.com/story/tempur-sealy-shares-fall-as-2016-outlook-cut-2016-09-27).
Nike Inc.'s stock (NKE) lost 1.7% as the sportswear giant's
quarterly report late Tuesday indicated a slowdown in growth
(http://www.marketwatch.com/story/nike-sales-and-profit-rise-orders-growth-slows-2016-09-27)
for a measure of future sales.
Alphabet Inc.(GOOGL)(GOOGL) was 0.7% lower after Google's parent
company was downgraded to underperform at Wedbush, which cited
concerns about a new approach for the company's search ads
(http://www.marketwatch.com/story/alphabet-shares-dip-premarket-as-wedbush-downgrades-to-underperform-2016-09-28).
BlackBerry Ltd.(BB.T) shares jumped 4.3% after the ailing
smartphone company and named a new chief financial officer.
Embattled banking giant Wells Fargo & Co.(WFC) said late
Tuesday that the company's head of community banking, Carrie
Tolstedt, has left the company
(http://www.marketwatch.com/story/wells-fargo-executive-departs-as-probe-into-scandal-launches-2016-09-27).
At the same time, CEO John Stumpf has recused himself from a probe
and agreed to forfeit outstanding equity awards worth about $41
million. Wells Fargo, rocked by a scandal involving employees
opening accounts without customers' knowledge, also said
independent directors and a law firm are investigating its
practices. Shares rose 0.7%.
(END) Dow Jones Newswires
September 28, 2016 11:05 ET (15:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.