U.S. stocks declined on Sept. 2, as energy producers saw their shares follow crude lower.
The Dow Jones Industrial Average depreciated 0.2 percent to 17,065.69 at 4 p.m. in New York, while the S&P 500 edged 0.1 percent lower to 2,002.09, according to Bloomberg. Earlier in the day, the benchmark group of stocks lost as much as 0.4 percent.
S&P index energy drops as brent falls
The S&P energy index plunged 1.3 percent, as brent crude futures reached their lowest price since May 31, 2013, Reuters reported. These contracts dropped amid concerns that there is too much supply of oil, and demand for the commodity is falling in both China and Europe.
Of the companies that are listed in the S&P 500 Index, Peabody Energy Corp, the world’s largest private-sector coal company, plummeted 3.7 percent to $15.29, according to the media outlet. Adam Sarhan, chief executive of Sarhan Capital in New York, commented on the situation.
“This isn’t a cause of alarm for the market. We’re just seeing energy pulling back a bit after a very big market rally and taking a bit of time to digest those gains,” he told the news source. Andy Brooks, head of U.S. equity trading at T. Rowe Price, also weighed in when speaking with The Wall Street Journal.
“We’ve had a nice run here in the last few weeks,” he told the news source. “It’s not surprising the market has given a little back.”
S&P’s August rally
It is worth noting that while the S&P lost value on the first trading day of September, it did so after rising 3.8 percent in August, surpassing 2,000, according to Bloomberg.
The index broke past this key level amid speculation surrounding Federal Reserve stimulus and robust economic data. The central bank has been gradually tapering its quantitative easing over the last several months, most recently lowering its regimen of bond purchases to $25 billion per month. In comparison, the financial institution bought $85 billion worth of these debt-based securities every month between late 2012 and the end of 2013.
Market participants have since tuned in to the statements of Fed officials in an effort to get a better sense of the schedule the central bank will use to bolster its benchmark borrowing rates. The financial institution has kept its interest rates close to record lows for the last several years in an effort to jumpstart the current recovery.
Index rises amid strong economic data
The S&P 500 also rose amid a government report that revised second quarter U.S. gross domestic product higher. Commerce Department data provided a higher estimate for this expansion, crediting an increase in business investment to this acceleration.
Figures from the Institute for Supply Management showed that the organization’s purchasing managers index for manufacturing hit 59.0 in August, compared to 57.1 in the previous month. As a result, the index reached its highest level in more than three years. The August reading surpassed the median forecast of 57 provided by economists participating in a Bloomberg survey, as well as the reading of 56.8 predicted by market experts taking part in a Wall Street Journal poll.
Job market figures have also been encouraging, as Labor Department reports have shown more than six straight months in which the nation’s employers created more than 200,000 positions.
The August report will show that the U.S. added more than 200,000 positions for the seventh straight month, according to a Bloomberg survey of economists. Kevin Caron, who works for Stifel Nicolaus & Co. in Florham Park, New Jersey, commented on the strong economic reports when speaking with Bloomberg.
“Overall, data supports the idea that the economy is accelerating going into the second half of the year, which certainly helps the equity markets,” Caron told the news source. “You’ve had investors who have been increasingly encouraged by the direction of the data in the economy. They’ve been discouraged from holding assets in low-yielding, safer assets.”
Potential headwinds
U.S. stocks could easily encounter additional headwinds, as Diane Jaffee, senior portfolio manager at TCW Group Inc., told The Wall Street Journal that global companies based in the U.S. could suffer if the euro zone economy continues to deteriorate. Jaffee emphasized the key importance of the statements the European Central Bank will make at its upcoming meeting.
Figures released on Monday, Sept. 1 showed that manufacturing activity in the euro zone cooled down more quickly than previously thought in August, and the recent weakness in the region’s economic data has helped support expectations that the European Central Bank will step up its policy stimulus at its meeting this week, according to the news source.
Investors who trade stocks online might be able to make better-informed trades by staying abreast of key developments in the equity markets. One key piece of information they should know about involves the S&P 500 Index rising 3.8 percent to surpass 2,000 in August, and then falling slightly on Sept. 2.
U.S. stocks declined on Sept. 2, as energy producers saw their shares follow crude lower.
The Dow Jones Industrial Average depreciated 0.2 percent to 17,065.69 at 4 p.m. in New York, while the S&P 500 edged 0.1 percent lower to 2,002.09, according to Bloomberg. Earlier in the day, the benchmark group of stocks lost as much as 0.4 percent.
S&P index energy drops as brent falls
The S&P energy index plunged 1.3 percent, as brent crude futures reached their lowest price since May 31, 2013, Reuters reported. These contracts dropped amid concerns that there is too much supply of oil, and demand for the commodity is falling in both China and Europe.
Of the companies that are listed in the S&P 500 Index, Peabody Energy Corp, the world’s largest private-sector coal company, plummeted 3.7 percent to $15.29, according to the media outlet. Adam Sarhan, chief executive of Sarhan Capital in New York, commented on the situation.
“This isn’t a cause of alarm for the market. We’re just seeing energy pulling back a bit after a very big market rally and taking a bit of time to digest those gains,” he told the news source. Andy Brooks, head of U.S. equity trading at T. Rowe Price, also weighed in when speaking with The Wall Street Journal.
“We’ve had a nice run here in the last few weeks,” he told the news source. “It’s not surprising the market has given a little back.”
S&P’s August rally
It is worth noting that while the S&P lost value on the first trading day of September, it did so after rising 3.8 percent in August, surpassing 2,000, according to Bloomberg.
The index broke past this key level amid speculation surrounding Federal Reserve stimulus and robust economic data. The central bank has been gradually tapering its quantitative easing over the last several months, most recently lowering its regimen of bond purchases to $25 billion per month. In comparison, the financial institution bought $85 billion worth of these debt-based securities every month between late 2012 and the end of 2013.
Market participants have since tuned in to the statements of Fed officials in an effort to get a better sense of the schedule the central bank will use to bolster its benchmark borrowing rates. The financial institution has kept its interest rates close to record lows for the last several years in an effort to jumpstart the current recovery.
Index rises amid strong economic data
The S&P 500 also rose amid a government report that revised second quarter U.S. gross domestic product higher. Commerce Department data provided a higher estimate for this expansion, crediting an increase in business investment to this acceleration.
Figures from the Institute for Supply Management showed that the organization’s purchasing managers index for manufacturing hit 59.0 in August, compared to 57.1 in the previous month. As a result, the index reached its highest level in more than three years. The August reading surpassed the median forecast of 57 provided by economists participating in a Bloomberg survey, as well as the reading of 56.8 predicted by market experts taking part in a Wall Street Journal poll.
Job market figures have also been encouraging, as Labor Department reports have shown more than six straight months in which the nation’s employers created more than 200,000 positions.
The August report will show that the U.S. added more than 200,000 positions for the seventh straight month, according to a Bloomberg survey of economists. Kevin Caron, who works for Stifel Nicolaus & Co. in Florham Park, New Jersey, commented on the strong economic reports when speaking with Bloomberg.
“Overall, data supports the idea that the economy is accelerating going into the second half of the year, which certainly helps the equity markets,” Caron told the news source. “You’ve had investors who have been increasingly encouraged by the direction of the data in the economy. They’ve been discouraged from holding assets in low-yielding, safer assets.”
Potential headwinds
U.S. stocks could easily encounter additional headwinds, as Diane Jaffee, senior portfolio manager at TCW Group Inc., told The Wall Street Journal that global companies based in the U.S. could suffer if the euro zone economy continues to deteriorate. Jaffee emphasized the key importance of the statements the European Central Bank will make at its upcoming meeting.
Figures released on Monday, Sept. 1 showed that manufacturing activity in the euro zone cooled down more quickly than previously thought in August, and the recent weakness in the region’s economic data has helped support expectations that the European Central Bank will step up its policy stimulus at its meeting this week, according to the news source.
Investors who trade stocks online might be able to make better-informed trades by staying abreast of key developments in the equity markets. One key piece of information they should know about involves the S&P 500 Index rising 3.8 percent to surpass 2,000 in August, and then falling slightly on Sept. 2.
The post US Stocks Move Lower as Energy Shares Drop appeared first on | HY Markets Official blog.
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