US open: Stocks in the red as Dow edges away from 20k, oil prices gain

US equity markets were in the red on Wednesday as the Dow edged away from the elusive 20,000 mark, while oil prices gained on the expected production cut coming into effect in the new year.

The Dow Jones Industrial Average was down 0.12% to 19,92,1.17, the S&P 500 fell 0.39% to 2,260.02 and the Nasdaq was lower by 0.59% to 5,454.97 at 1532 GMT, with volumes thinner than usual following the Christmas holidays.

On Friday the Dow was was within 70 points of hitting 20,000.

Meanwhile, oil prices advanced as Brent crude was up 0.7% to $56.49 a barrel, and West Texas Intermediate rose 0.46% to $54.15 at 1455 GMT.

Gold on Comex crept up 0.04% to 1,139.20 per troy ounce.

Lukman Otunuga, research analyst at FXTM, said: “WTI Crude edged above $54 on Wednesday as investors prepared for the OPEC and non-OPEC production cut deal which is set to come into effect from 1 January 2017. The prospect of major oil producers trimming output by almost 1.8m barrels a day has been the engine behind oil’s resurgence in the final quarter of 2016.

“Although oil’s trajectory points to the upside, gains could be limited in the New Year if there are any disputes or lack of clarity to the pending deal. Concerns still linger over the compliance side of the agreement, while the fact that OPEC has no rules in place for punishing members who cheat, could plant a seed of doubt over the implementation of the output cut. Technical traders may observe how WTI crude oil reacts to the $54.50 resistance which if broken could open a path towards $56.”

The dollar was up 0.39% versus sterling to 0.8181, rose 0.58% against the euro to 0.9618, and increased 0.14% versus the yen to 117.60.

Across the pond in Europe, the main indices were wavering between small gains and losses as investors continued to keep an eye on troubled Italian lender Banca Monte dei Paschi di Siena after the European Central Bank said it would need €8.8bn to fix its finances. This was much more than the €5bn originally thought and almost half of the government’s approved €20bn rescue plan for banks.

On the data front, pending home sales unexpectedly declined in November to their lowest level in nearly a year as the upswing in mortgage rates and not enough inventory dispirited some would-be buyers, according to the National Association of Realtors.

NAR’s monthly index fell 2.5% to 107.3 last month and is now 0.4% below last November’s 107.7. Economists had been expecting the index to edge up 0.5% on the month.

In corporate news, Delta Airlines was down 1.25% and Boeing fell 0.61%, after Delta officially cancelled a deal on Tuesday for 18 Boeing widebody jets.

Technology firm Nvidia’s shares retreated 3.15% after rising 9.3% last week and gaining about 232% the past year.