US close: Stocks fall on election uncertainty, slide in oil prices
US stocks finished slightly lower on Monday as strong personal spending data was offset by a drop in oil prices and uncertainty ahead of the presidential elections.
The Dow Jones Industrial Average closed down 0.10% to 18,142.42 points, the S&P 500 shed 0.01% to 2,126.15 points and the Nasdaq fell 0.02% to 5,189.13 points.
Oil prices fell amid doubts major producers will agree a deal to curb production, with West Texas Intermediate down 3.9% to $46.84 per barrel and Brent down 2.8% to $48.32 per barrel at 2030 GMT.
On a positive note for markets, US consumer spending - which accounts for 70% of economic activity in the nation – rose 0.5% in September after falling 0.1% in August. Economists had expected a 0.4% increase. Personal income grew 0.3% in September, compared to a 0.2% gain in August and forecasts for a 0.4% rise.
The core personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, edged up 0.1% month-on-month in September after a 0.2% rise in August, as expected by analysts. Compared to September 2015, the core PCE climbed 1.7%, the same rate of annualised growth as August and in line with forecasts. The Fed, which is targeting 2% inflation, had also expected a 1.7% increase in PCE.
The reports come ahead of Thursday’s Federal Reserve policy meeting. While the central bank is expected to keep interest rates unchanged for now, many analysts see a hike in December following a recent batch a strong data.
“Even though it looks like real GDP growth will decelerate decidedly in the fourth quarter, expect the Fed to increase interest rates at its December meeting,” according to Berenberg.
“As Fed Vice Chairman Stanley Fischer has stated, the Fed has achieved its employment mandate and inflation is very close to the Fed’s 2% longer-run target.”
Meanwhile, investors were shaken by news surrounding the FBI investigation into Hillary Clinton’s emails, as she is seen as the market-friendly choice to win the election on 8 November.
FBI Director James Comey sent a letter to Congress saying the agency was taking another look into the private server by Clinton while she was secretary of state, although Senate Democratic leader Harry Reid said Comey may have broken the law that prohibits federal officials from using their office to influence an election.
The news of the probe had sent US stocks into the red on Friday.
“The size of the reaction in US equity indices on Friday to the FBI announcement goes to show how much could hinge on the Presidential election result,” said CMC Markets’ Jasper Lawler.
“The sharp down move in reaction to news that boosts Trump’s chances is a peak preview of what to expect if he takes the White House.”
In company news, shares in General Electric dipped after it announced a deal to combine its oil and gas business with Baker Hughes. Shares in Baker Hughes fell.
Level 3 Communications gained after the communications services said it is to be taken over local telephone service provider CenturyLink for $25bn.
Shares of Transocean Ltd. and Chesapeake Energy Corp. declined on the slide in oil prices.
Dow Jones - Risers
Chevron Corp. (CVX) $104.75 0.90%
International Business Machines Corp. (IBM) $153.71 0.71%
Unitedhealth Group Inc. (UNH) $141.33 0.70%
Goldman Sachs Group Inc. (GS) $178.24 0.62%
Johnson & Johnson (JNJ) $115.99 0.57%
McDonald's Corp. (MCD) $112.52 0.42%
Coca-Cola Co. (KO) $42.40 0.40%
Intel Corp. (INTC) $34.87 0.37%
United Technologies Corp. (UTX) $102.20 0.35%
Visa Inc. (V) $82.51 0.35%
Dow Jones - Fallers
Nike Inc. (NKE) $50.18 -3.54%
Exxon Mobil Corp. (XOM) $83.30 -1.72%
Home Depot Inc. (HD) $122.01 -1.27%
Walt Disney Co. (DIS) $92.69 -1.24%
E.I. du Pont de Nemours and Co. (DD) $68.79 -0.95%
Pfizer Inc. (PFE) $31.71 -0.69%
Caterpillar Inc. (CAT) $83.46 -0.50%
General Electric Co. (GE) $29.10 -0.41%
Boeing Co. (BA) $142.43 -0.41%
3M Co. (MMM) $165.30 -0.28%
S&P 500 - Risers
DaVita Inc (DVA) $58.62 6.27%
Loews Corp. (L) $43.03 4.90%
Newmont Mining Corp. (NEM) $37.04 4.69%
Level 3 Communications, Inc. (LVLT) $56.15 3.89%
Express Scripts Holding Co (ESRX) $67.40 3.55%
Darden Restaurants Inc. (DRI) $64.75 3.48%
NiSource Inc. (NI) $23.26 3.24%
Royal Caribbean Cr (RCL) $76.87 3.22%
Roper Technologies Inc (ROP) $173.27 3.22%
NRG Energy Inc. (NRG) $10.63 3.20%
S&P 500 - Fallers
Zimmer Biomet Holdings Inc (ZBH) $105.39 -13.99%
CenturyLink Inc. (CTL) $26.58 -12.54%
Johnson Controls International plc (JCI) $40.32 -7.86%
Baker Hughes Inc. (BHI) $55.40 -6.29%
Transocean Ltd. (RIG) $9.60 -5.88%
Chesapeake Energy Corp. (CHK) $5.51 -4.84%
Hess Corp. (HES) $47.96 -4.63%
Perrigo Company plc (PRGO) $83.24 -4.45%
Endo International Plc (ENDP) $18.75 -4.19%
Marathon Oil Corp. (MRO) $13.18 -3.94%
Nasdaq 100 - Risers
Check Point Software Technologies Ltd. (CHKP) $84.56 4.42%
Express Scripts Holding Co (ESRX) $67.40 3.55%
Liberty Media Corporation - Series C (LMCK) $27.41 2.54%
Liberty Media Corporation - Class A (LMCA) $27.83 2.13%
Dish Network Corp. (DISH) $58.56 2.06%
Walgreens Boots Alliance, Inc. (WBA) $82.73 2.01%
Amazon.Com Inc. (AMZN) $789.82 1.74%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $38.87 1.65%
Skyworks Solutions Inc. (SWKS) $76.94 1.61%
Applied Materials Inc. (AMAT) $29.08 1.47%
Nasdaq 100 - Fallers
Endo International Plc (ENDP) $18.75 -4.19%
Alexion Pharmaceuticals Inc. (ALXN) $130.50 -3.75%
Regeneron Pharmaceuticals Inc. (REGN) $345.02 -3.04%
Amgen Inc. (AMGN) $141.16 -2.77%
Vertex Pharmaceuticals Inc. (VRTX) $75.86 -2.22%
Mylan Inc. (MYL) $36.50 -1.86%
Illumina Inc. (ILMN) $136.14 -1.80%
Celgene Corp. (CELG) $102.18 -1.66%
Whole Foods Market Inc. (WFM) $28.29 -1.60%
Baidu Inc. (BIDU) $176.86 -1.52%