US close: Dow slips on oil and housing data

The Dow Jones on Wednesday dropped to its lowest close since the first week of August as oil prices retreated and housing market data missed estimates.

The Dow closed down 0.4% to 18,479.50 points, the S&P 500 fell 0.5% to 2,175.44 and the Nasdaq gave up two weeks of gains as it slid 0.8% to 5,217.69 by the finish.

Oil prices were also under the cosh after official data from the Energy Information Administration showed US weekly crude increased by 2.5m barrels last week to 523.6m barrels.

This followed a report from the American Petroleum Institute, which showed an increase of 4.5m barrels in US crude stockpiles last week.

West Texas Intermediate crude tanked almost 3% to $46.75 per barrel and Brent fell nearly 2% to $48.98 per barrel.

The dollar strengthened 0.35 against the euro to 1.1265 but moved steadily lower versus sterling, with cable moving 0.3% to $1.3234.

Other economic data, from the US Federal Housing Finance Agency, house price index rose 0.2% in June after the same gain in May, thought this was weaker than the 0.3% expected.

Housing data from the National Association of Realtors missed the mark too, with sales of existing US homes falling 3.2% to a seasonally-adjusted annual rate of 5.39m, missing expectations for a much smaller drop of 0.4%.

Compared to a year ago, sales were down 1.6%. Meanwhile, the median price for an existing home was up 5.3% from July last year to $244,100.

Looking ahead, the market is holding its breath somewhat over the Federal Reserve’s annual conference in Jackson Hole on Friday, where central bank chief Janet Yellen’s speech will be near-forensically examined for any clues on the timing of the next interest rate hike.

“While the message coming from Fed officials has been quite mixed and left the markets with little idea of what the Fed is planning –it initially intended to raise rates four times this year and so far it hasn’t done so once – the message from Stanley Fischer and William Dudley, both permanent voters on the FOMC, last week were quite hawkish,” said Craig Erlam, senior market analyst at Oanda.

“Should Yellen deliver an equally hawkish warning on Friday then I expect markets to respond accordingly, with December likely becoming the most likely meeting but September being more priced in that it currently is.”

In corporate news, Pfizer stock stiffened by midsession before drooping lower after agreeing a deal to buy AstraZeneca’s antibiotics division.

Apple was slightly lower as a report from the US Treasury challenged Brussels about its plans to demand as much as $19bn from Apple for alleged unpaid taxes as a result of so-called sweetheart deals with Ireland.

Express Inc tanked after the fashion retailer reported second quarter results that missed analysts’ expectations.

La-Z-Boy slumped after its first-quarter earnings and sales late on Tuesday missed analysts’ expectations.

Monsanto was not much moved as news emerged overnight it was getting closer to agreeing a combination with Germany's Bayer, with the two chemical giants making progress on issues including the purchase price and a termination fee, Bloomberg reported, citing people familiar with the matter.

Intuit shares dropped after the software company’s revenue forecast left investors disappointed, despite better-than-expected fourth-quarter results.

Dow Jones - Risers

Nike Inc. (NKE) $60.22 1.01%
Chevron Corp. (CVX) $102.24 0.55%
Travelers Company Inc. (TRV) $117.11 0.41%
Wal-Mart Stores Inc. (WMT) $72.23 0.36%
Exxon Mobil Corp. (XOM) $88.02 0.34%
JP Morgan Chase & Co. (JPM) $65.95 0.27%
Cisco Systems Inc. (CSCO) $31.06 0.26%
Microsoft Corp. (MSFT) $57.95 0.10%
General Electric Co. (GE) $31.24 0.03%
Coca-Cola Co. (KO) $43.85 0.00%