U.S. Stocks Waver as Oil Prices Slump
September 17 2019 - 11:37AM
Dow Jones News
By Anna Isaac and Karen Langley
The Dow Jones Industrial Average slipped Tuesday as oil prices
slumped, reversing some of their historic jump the day earlier.
The blue-chip index fell 44 points, or 0.2%, a day after
breaking an eight-session winning streak. The S&P 500 and the
Nasdaq Composite were essentially flat.
Brent crude, the global oil benchmark, dropped 6.5% to $64.52 a
barrel after Reuters reported that Saudi output could return more
quickly than initially expected. Prices on Monday had notched their
biggest percentage gain on record after a weekend attack on Saudi
oil facilities left investors struggling to calculate the likely
impact on global supplies.
In addition to monitoring information about oil supply,
investors are looking ahead to the Federal Reserve's policy meeting
this week. Markets are expecting another quarter percentage point
interest rate cut Wednesday, but there will also be scrutiny of how
recent developments with Saudi Arabia, and trade talks with China,
might influence future policy.
New data Tuesday showed U.S. industrial production rebounded
sharply in August, a sign that is likely to ease worries about a
manufacturing-driven economic downturn.
"What we are going to watch going forward is to see how these
higher oil prices affect the consumer, especially here in the
United States, as the U.S. consumer is driving the growth in the
economy right now," said Carter Henderson, portfolio specialist at
Fort Pitt Capital Group.
The Stoxx Europe 600 slipped 0.2% after a downbeat session in
Asia.
In China, the Shanghai Composite dropped 1.7% and Hong Kong's
Hang Seng fell 1.2% as the People's Bank of China remained
restrained in its response to a recent spate of weak economic data.
The central bank on Tuesday disappointed economists who had hoped
it would move to effectively lower interest rates, though it took
steps to inject 200 billion yuan ($28.3 billion) into the banking
system.
"Because there was an injection of cash people were looking at
the PBOC closely. There was some surprise that there wasn't a cut
now. In recent history, they tend to keep pace with the Fed, but
they could still do that in the coming days," said Freya Beamish,
chief Asia economist at Pantheon Macroeconomics.
China's central bank officials will be more focused on trade
talks with the U.S. in October than on a cut in rates, Ms. Beamish
said.
Despite the gloom, Japan's Nikkei edged up 0.1% as President
Trump moved ahead with a trade pact with the country on areas such
as digital technology and agriculture. The step should see some
tariffs on Japanese imports to the U.S. lowered.
The U.S. 10-year Treasury yield slipped to at 1.829%,from 1.843%
Monday. Bond yields fall as prices rise.
Write to Anna Isaac at anna.isaac@wsj.com
(END) Dow Jones Newswires
September 17, 2019 11:22 ET (15:22 GMT)
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