Stocks Fall as Investors Look to Fed's Jackson Hole Meeting
August 25 2016 - 9:26AM
Dow Jones News
By Riva Gold
Stocks drifted lower while the dollar steadied Thursday, with
market attention focused on the Federal Reserve's annual Jackson
Hole meeting.
Chairwoman Janet Yellen is set to give a speech at the central
bankers' conference on Friday. While little direction on interest
rates is expected, investors will be watching for any clues on the
course of monetary policy or her assessment of the U.S.
economy.
Stocks and the dollar have been locked in a narrow range ahead
of the conference, with little else on the earnings or economic
calendar to steer direction. Investors are roughly evenly divided
on whether the Fed will raise rates in December, but few are
expecting a move at the bank's September meeting.
Futures pointed to a 0.2% opening loss for the S&P 500,
following modest declines in Europe and Asia.
Shares of HP Inc. were down 5.8% in premarket trading after the
company offered a forecast for the current quarter below market
expectations, while Dollar General Corporation shed 9.5% and Dollar
Tree Inc. lost 6.8%.
Stocks also caught a downdraft from Europe, where the Stoxx
Europe 600 was down 0.8%, led lower by shares of pharmaceutical
companies.
Health-care shares retreated after political pressure to tamp
down drug prices pushed biotechnology stocks lower Wednesday on
Wall Street. Democratic presidential candidate Hillary Clinton had
issued a statement calling EpiPen price increases "outrageous,"
sparking a modest selloff.
Mylan NV responded Thursday to backlash over price increases for
its EpiPen emergency allergy treatment by promising to reduce the
costs that some patients pay, though the drugmaker stopped short of
saying it would roll back prices or limit future increases. Shares
were up 3.4% premarket.
Adding to the downbeat tone in Europe, Germany's Ifo index, a
key indicator of the economy, fell sharply in August, disappointing
expectations for a slight increase.
"Given the relatively large downside surprise in the business
climate index, we presume that first negative signs of the U.K.'s
decision to leave the European Union are feeding through to the
German industry," strategists at Barclays wrote in a note.
Trading in Asia was mostly softer. Shares in Shanghai were down
0.6%, even as China's central bank put more cash into the system
through 14-day reverse repurchase agreements, which are effectively
loans to commercial banks.
Australia's S&P ASX 200 fell 0.4% following recent declines
in commodities prices.
Brent crude oil was last flat at $49.04 a barrel after dropping
for three of the past four sessions. Gold was down 0.5% at $1,322
an ounce.
Despite Wednesday's pullback, both the Dow industrials and the
S&P 500 remain within 1% of their all-time highs reached last
week. Some investors continue to question the rally.
"You can hardly see how you can move up from here," said Fabrice
Theveneau, head of global equities at Lyxor Asset Management. While
profits so far have been better than feared, companies could come
under pressure as wages rise, and the U.S. election could be a
source of market turbulence in the fall, he said.
--Shen Hong and Austen Hufford contributed to this article.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
August 25, 2016 09:11 ET (13:11 GMT)
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