Apple, energy stocks drag down Wall St.
United States stocks fell, weighed down by a fall in Apple as well as a drop in energy companies after OPEC failed to agree on output policy.
Oil prices dropped about by two per cent and the S&P energy index tumbled by 1.13 per cent. Major oil producers Exxon and Chevron were down about by one per cent.
Apple was down by about 1.3 per cent after Goldman Sachs cut its price target on the stock, citing lower growth expectations for the smartphone industry. The stock was the biggest drag on all three major indexes.
The European Central Bank kept its negative interest rates unchanged and President Mario Draghi said inflation would likely remain very low or negative in the next few months.
As well as uncertainty over the OPEC decision, contrasting data from the United States and abroad over the past two days led traders to lower their expectations of the Federal Reserve raising interest rates as soon as this month.
The ADP National Employment report yesterday showed U.S. private payrolls increased a less-than-expected 173,000 in May. But, as the economy nears full employment, job creation would slow, said Mark Zandi, Moody’s Analytics’ chief economist.
The data comes ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.
The number of Americans applying for unemployment benefits unexpectedly dropped last week, pointing to a tightening labor market.
“Obviously there are several major events that the market is going to focus on and could cause a bumpy ride for stocks today,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
At 9:45 a.m. ET the Dow Jones Industrial Average .DJI was down 44.07 points, or 0.25 per cent, at 17,745.6.
The S&P 500 .SPX was down 5.36 points, or 0.26 per cent, at 2,093.97 and the Nasdaq Composite .IXIC was down 9.41 points, or 0.19 per cent, at 4,942.84.
Eight of the 10 major S&P sectors were lower, led by the energy index.
Mining equipment maker Joy Global (JOY.N) rose 13.5 per cent after it reported a surprise adjusted profit for the latest quarter.
Cloud storage provider Box (BOX.N) fell 9.1 per cent to $11.64 after the company reported a slowdown in billings growth in the first quarter.