US open: Stocks edge lower ahead of key data

By Sharecast News

Sharecast News | 30 May, 2017

Updated : 16:46

Investors played it safe at the start of the week - and ahead of Friday's all-important monthly jobs report - with weaker oil prices offsetting better-than-expected readings on home prices and personal consumption and spending.

At 1616 BST, the Dow Jones Industrial Average was off by 0.20% to 2,037.31 as the S&P 500 slipped 0.12% to 2,412.96.

Meanwhile, oil prices retreated as investors continued to digest the outcome of last week's Opec meeting in Vienna and after analysts at Goldman Sachs lowered their forecast for West Texas Intermediate in 2017 from $54.80 to $52.92.

That sent WTI crude oil futures down 1.0% to $49.30 a barrel.

Unsurprisingly, the sectors coming under the most selling pressure were: Pipelines (-2.80%), Aluminium (-1.83%), Airlines (-1.82%), Exploration&Production (-1.74%) and Oil Equipment&Services (-1.22%).

The better known large-cap technology stocks were still in the spotlight as the Nasdaq-100 added to the previous week's gains and shares in Amazon.com topped the $1,000 mark in intra-day trading.

"When in doubt, buy tech stocks. That is a fair summary of this afternoon’s price action. Aside from the Nasdaq 100, almost all the other major markets are trading lower to a greater or lesser degree. Momentum traders clearly still think that the likes of Facebook and Amazon can go higher, however, with the Nasdaq 100 having gained almost a fifth so far this year," said Chris Beauchamp, chief market analyst at IG.

Against that backdrop, Dallas Fed president Robert Kaplan told CNBC he expected two more interest rate hikes from the central bank in 2017.

Kaplan also dismissed worries about current stockmarket valuations, albeit while adding that "some correction" might be healthy from the point of view of helping the expansion last longer.

Data out earlier on Monday showed house prices in the US rose more than expected in March.

S&P/Case-Shiller's 20-City composite house price index was up 5.9% year-on-year, the same as the month before and beating expectations for a slowdown to 5.7%.

That marked the biggest increase since July 2014.

In other data, figures from the Department of Commerce showed that Americans spent 0.4% more month-on-month in April, alongside an identical increase in their personal incomes.

Both increases were just as expected by economists; but upwards revisions to the prior two months-worth of data meant the figures in fact came in well ahead of forecasts.

Elsewhere, Fed Governor Lael Brainard was due to give a speech later in the day at the New York Association for Business Economics.

Shares in offshore driller Ensco were lower despite announcing plans to acquire rival Atwood Oceanics for $6.9bn.

Stock in TiVo Corp. shot 9% higher following news that it had won a patent case against Comcast Corp..

Dow Jones - Risers

Verizon Communications Inc. (VZ) $45.92 1.32%
Nike Inc. (NKE) $52.90 0.60%
Cisco Systems Inc. (CSCO) $31.67 0.54%
3M Co. (MMM) $201.57 0.45%
Pfizer Inc. (PFE) $32.28 0.44%
Johnson & Johnson (JNJ) $127.33 0.33%
Intel Corp. (INTC) $36.37 0.30%
Merck & Co. Inc. (MRK) $65.11 0.29%
Wal-Mart Stores Inc. (WMT) $78.26 0.17%
Microsoft Corp. (MSFT) $70.06 0.14%