US close: Stocks slip as Yellen signals December rate hike; energy sector weighs
US stocks ended lower as energy stocks declined in line with the oil price and after Federal Reserve chairwoman Janet Yellen hinted at the possibility of a rate hike in December.
The Dow Jones Industrial Average closed down 0.3%, the S&P 500 fell 0.4% and the Nasdaq ended 0.1% lower.
In a testimony before the House financial services committee, Yellen said the committee has made no decision yet but that the US economy was performing well and a rate hike next month was still a “live possibility”.
"The committee does feel that moving in a timely fashion if the data and outlook justify such a move is a prudent thing to do because we will be able to move at a more gradual and measured pace," Yellen said.
New York Fed President William Dudley said he would "completely agree" with Yellen’s comments about a rate hike if economic data points to an improvement in the labour market and a pick-up in inflation.
ADP payroll meets expectations
On the economic data front, the US private sector generated slightly more jobs than expected last month, data released on Wednesday showed.
According to private consultancy ADP, employers added 182,000 jobs in October compared with a downwardly revised 190,000 reading in the previous month and with analysts’ expectations for a 180,000 reading.
“For Friday’s official employment report from the Labor Department, we expect nonfarm payroll growth of 175k and a one-tenth decline in the unemployment rate, to 5.0%,” analysts at Barclays said in a note.
Elsewhere, the Institute for Supply Management's (ISM) non-manufacturing index, which surveys the sector's purchasing and supply executives, climbed to 59.1 last month from 56.9 and compared with analysts’ expectations for a 56.5 reading.
The US monthly trade deficit narrowed sharply to $40.8bn in September, down from the revised estimate of $48.0bn in August and compared with analysts’ forecast of $41bn.
Meanwhile, the Mortgage Bankers Association said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, declined 0.8% in the week ended 30 October.
Mixed earnings
In company news, electric car maker Tesla surged after it reiterated its sales guidance for the remainder of the year, despite posting a wider quarterly loss late on Tuesday.
Handmade and vintage good marketplace Etsy tumbled after posting a bigger net loss and issuing a warning over fourth quarter profit, while online deals firm Groupon slumped after issuing a weak outlook and naming a new chief executive.
Lumber Liquidators reversed earlier losses and rose sharply despite posting a quarterly loss, while Michael Kors advanced as profits and revenue soared.
Avon Products tanked after profit fell short of expectations.
Oil prices fell, giving up gains made in the previous session as data from the US Energy Information Administration showed US crude stockpiles rose by 2.8m barrels last week compared with expectations for a 2.5m barrel rise.
West Texas Intermediate was down 2.9% to $46.52 a barrel, while Brent crude slid 3.5% to $48.76 a barrel.
The dollar rose 0.2% against the pound, 0.4% against the yen, and 0.9% against the euro, while gold futures slipped 0.6% to $1,107.00.
S&P 500 - Risers
Range Resources Corp. (RRC) $34.10 +10.04%
NRG Energy Inc. (NRG) $14.07 +4.38%
Netflix Inc. (NFLX) $114.06 +3.94%
Electronic Arts Inc. (EA) $74.30 +3.34%
Activision Blizzard Inc. (ATVI) $36.99 +3.27%
Southwestern Energy Co. (SWN) $11.67 +3.18%
Dun & Bradstreet Corp. (DNB) $111.77 +3.01%
Becton, Dickinson & Company (BDX) $150.96 +2.95%
Devon Energy Corp. (DVN) $46.47 +2.76%
Amazon.Com Inc. (AMZN) $641.17 +2.54%
S&P 500 - Fallers
United States Steel Corp. (X) $11.05 -14.61%
Mosaic Company (MOS) $33.36 -8.63%
Motorola Solutions Inc (MSI) $65.25 -8.56%
Keurig Green Mountain Inc (GMCR) $50.87 -7.24%
Genworth Financial Inc. (GNW) $4.52 -6.80%
Cerner Corp. (CERN) $61.63 -6.75%
Time Warner Inc. (TWX) $72.19 -6.61%
Viacom Inc. Class B (VIAB) $47.91 -6.59%
Baker Hughes Inc. (BHI) $51.56 -5.33%
Twenty-First Century Fox Inc Class A (FOXA) $29.65 -5.21%
Dow Jones I.A - Risers
Merck & Co. Inc. (MRK) $55.51 +0.73%
Visa Inc. (V) $78.33 +0.55%
Microsoft Corp. (MSFT) $54.41 +0.48%
Goldman Sachs Group Inc. (GS) $191.56 +0.46%
Wal-Mart Stores Inc. (WMT) $58.37 +0.45%
E.I. du Pont de Nemours and Co. (DD) $64.28 +0.42%
Travelers Company Inc. (TRV) $114.08 +0.34%
United Technologies Corp. (UTX) $100.30 +0.30%
McDonald's Corp. (MCD) $112.38 +0.27%
3M Co. (MMM) $158.90 +0.09%
Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $114.62 -2.58%
Pfizer Inc. (PFE) $34.13 -2.40%
Walt Disney Co. (DIS) $113.22 -2.01%
Chevron Corp. (CVX) $96.73 -1.44%
Exxon Mobil Corp. (XOM) $85.92 -1.07%
Nike Inc. (NKE) $130.33 -0.81%
Verizon Communications Inc. (VZ) $46.13 -0.69%
Apple Inc. (AAPL) $122.00 -0.47%
Cisco Systems Inc. (CSCO) $28.48 -0.45%
Coca-Cola Co. (KO) $41.97 -0.45%
Nasdaq 100 - Risers
Tesla Motors Inc (TSLA) $231.65 +11.18%
Illumina Inc. (ILMN) $159.06 +4.06%
Netflix Inc. (NFLX) $114.06 +3.94%
Electronic Arts Inc. (EA) $74.30 +3.34%
Activision Blizzard Inc. (ATVI) $36.99 +3.27%
Baidu Inc. (BIDU) $197.95 +2.83%
Amazon.Com Inc. (AMZN) $641.17 +2.54%
Garmin Ltd. (GRMN) $36.62 +1.92%
Nxp Semiconductors Nv (NXPI) $79.98 +1.90%
Avago Technologies Ltd. (AVGO) $124.13 +1.63%
Nasdaq 100 - Fallers
Keurig Green Mountain Inc (GMCR) $50.87 -7.24%
Cerner Corp. (CERN) $61.63 -6.75%
Viacom Inc. Class B (VIAB) $47.91 -6.59%
Twenty-First Century Fox Inc Class A (FOXA) $29.65 -5.21%
Seagate Technology Plc (STX) $38.81 -3.86%
Liberty Interactive Corporation QVC Group (QVCA) $26.65 -3.16%
Vertex Pharmaceuticals Inc. (VRTX) $124.91 -2.69%
Vimpelcom Ltd Ads (VIP) $3.41 -2.57%
Discovery Communications Inc. Class A (DISCA) $30.30 -2.51%
Staples Inc. (SPLS) $13.04 -2.47%