US close: Oil stocks fall on higher inventories; Caterpillar slumps on fraud report
US stocks closed mixed as oil stocks fell on a surprise rise in inventories and Caterpillar shares were hit after a report accused the company of tax fraud.
At the Wednesday close the Dow Jones Industrial Average was 69 points lower to 20,856, the Nasdaq was 3 points higher to 5,838 and the S&P 500 5.41 points lower at 2363.
Caterpillar shares fell 3% after a the government-commissioned report was revealed by the New York Times.
“Caterpillar did not comply with either U.S. tax law or U.S. financial reporting rules,” the Times cited report author Leslie A. Robinson as saying.
“I believe that the company’s noncompliance with these rules was deliberate and primarily with the intention of maintaining a higher share price. These actions were fraudulent rather than negligent,” he added.
Meanwhile, West Texas Intermediate was down 5.42% to $50.26 per barrel and Brent crude fell 4.95% to $53.15.
US crude inventories rose more than expected, sending oil stocks lower on fears of oversupply.
Inventories increased by 8.2m barrels from the previous week. At 528.4m barrels, U.S. crude oil inventories "are above the upper limit of the average range for this time of year", the U.S. Energy Information Administration said.
There was a small boost for investors as ADP employment data, a precursor to the all-important non-farm payrolls report, revealed that 298,000 private sector jobs were added in February, the most since April 2014 and well above the 187,000 expected.
As investors bet the Fed will hike rates at its meeting on 14-15 March, analysts said investor focus will shift to the release of the non-farm payrolls report on Friday for signs of continued growth.
Following the stronger than expected ADP data, gold extended its decline on expectations of a rate hike, as the yellow metal fell 0.57% to $1,207.94 per troy ounce.
“The ADP report revealed some interesting trends. Small businesses continued to ramp up their payrolls after sluggish hiring in the months preceding the elections. The 104,000 jobs added is the largest since June 2016 and reflects the surge in optimism among small businesses in recent months," analysts at Berenberg said.
“The Fed is highly likely to hike in March, but what’s next? The Fed will certainly acknowledge the strong job gains along with other data and soaring confidence. If job gains of this magnitude continue and wages tilt up and inflation pressures build, the Fed will be forced to hike more than expected in 2017-2018. Moreover, as we have noted, if pro-growth fiscal reforms are enacted, the Fed’s policy adjustments would be accentuated.”
US wholesale inventories dropped 0.2% in January, after rising 1% in December. Economists had expected inventories to fall 0.1%.
On the corporate front, Dick’s Sporting Goods gained 2.28% after the retailer said it will cut about 20% of its vendors and took a $46m write down.
Vera Bradley fell slightly as it beat fourth quarter profit expectations but gave a downbeat outlook
Hovnanian Enterprises slumped 7.44% as the house builder posted a 4.1% fall in revenue to $575.6m.
Urban Outfitters was down 2.6% after it missed fourth quarter revenue and earnings forecasts.
Dow Jones - Risers
Microsoft Corp. (MSFT) $64.86 0.71%
Home Depot Inc. (HD) $146.84 0.56%
E.I. du Pont de Nemours and Co. (DD) $79.59 0.25%
Johnson & Johnson (JNJ) $124.12 0.23%
McDonald's Corp. (MCD) $128.17 0.08%
3M Co. (MMM) $189.22 0.07%
Wal-Mart Stores Inc. (WMT) $69.83 -0.05%
Walt Disney Co. (DIS) $110.78 -0.07%
Visa Inc. (V) $88.98 -0.09%
Coca-Cola Co. (KO) $41.94 -0.11%
Dow Jones - Fallers
Caterpillar Inc. (CAT) $93.02 -3.03%
Chevron Corp. (CVX) $109.73 -1.86%
Exxon Mobil Corp. (XOM) $81.20 -1.60%
Verizon Communications Inc. (VZ) $49.06 -0.77%
Cisco Systems Inc. (CSCO) $33.95 -0.73%
American Express Co. (AXP) $79.06 -0.65%
Travelers Company Inc. (TRV) $121.40 -0.61%
Intel Corp. (INTC) $35.60 -0.56%
United Technologies Corp. (UTX) $111.69 -0.53%
Goldman Sachs Group Inc. (GS) $249.81 -0.43%
S&P 500 - Risers
H&R Block Inc. (HRB) $23.95 14.92%
PPG Industries Inc. (PPG) $107.44 6.61%
TripAdvisor Inc. (TRIP) $43.85 6.15%
Macy's Inc. (M) $31.85 3.38%
Lennar Corp. Class A (LEN) $52.19 2.93%
Nordstrom Inc. (JWN) $45.18 2.61%
Kohls Corp. (KSS) $40.54 2.61%
Viacom Inc. Class B (VIAB) $43.95 2.38%
Regeneron Pharmaceuticals Inc. (REGN) $381.14 2.31%
Coach Inc. (COH) $38.68 2.27%
S&P 500 - Fallers
Marathon Oil Corp. (MRO) $14.83 -8.90%
Murphy Oil Corp. (MUR) $25.85 -6.81%
Devon Energy Corp. (DVN) $40.64 -6.70%
Chesapeake Energy Corp. (CHK) $4.95 -5.89%
Newfield Exploration Co (NFX) $33.96 -5.30%
Pioneer Natural Resources Co. (PXD) $184.16 -5.04%
Eog Resources Inc. (EOG) $94.74 -4.81%
Noble Energy Inc. (NBL) $34.16 -4.79%
Frontier Communications Co. (FTR) $2.50 -4.58%
Diamond Offshore Drilling Inc. (DO) $15.26 -3.96%
Nasdaq 100 - Risers
TripAdvisor Inc. (TRIP) $43.85 6.15%
Liberty Interactive Corporation QVC Group (QVCA) $19.27 2.47%
Viacom Inc. Class B (VIAB) $43.95 2.38%
Regeneron Pharmaceuticals Inc. (REGN) $381.14 2.31%
Hologic Inc. (HOLX) $41.87 2.22%
Tractor Supply Company (TSCO) $72.77 1.88%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $274.89 1.84%
JD.com, Inc. (JD) $31.31 1.80%
Expedia Inc. (EXPE) $124.55 1.76%
QUALCOMM Inc. (QCOM) $57.71 1.73%
Nasdaq 100 - Fallers
Liberty Global Plc Lilac Class C (LILAK) $23.04 -3.23%
Liberty Global Plc Lilac Class A (LILA) $23.04 -2.54%
Alexion Pharmaceuticals Inc. (ALXN) $126.57 -2.02%
CSX Corp. (CSX) $47.58 -1.77%
Verisk Analytics Inc. (VRSK) $80.73 -1.36%
Micron Technology Inc. (MU) $25.32 -1.27%
Cerner Corp. (CERN) $54.31 -1.21%
Walgreens Boots Alliance, Inc. (WBA) $85.24 -0.87%
Shire Plc Ads (SHPG) $177.76 -0.85%
Sba Communications Corp. (SBAC) $114.45 -0.83%