US close: News of FBI probe into Clinto e-mails weighs on Wall Street

Traders were sent scurrying at the end of the week after news broke that the FBI had reopened an investigation into the use of an unauthorised email server by Hillary Clinton when she was US Secretary of State.

That saw the greenback finish 0.66% stronger against the Mexican peso at 18.96 alongside gains of 0.57% for gold futures to 1,276.80/oz.

The Dow Jones Industrial Average lost 0.05% or 8.49 points to finish at 18,161.19 points, while the S&P 500 gave back 0.31% to 2,126.41 points and the Nasdaq retreated 0.50% to 5,190.10 points.

Meanwhile, crude oil futures retreated sharply on the heels of reports that Iraq and Iran continued to refuse cutting their own levels of output, stoking doubts that the cartel will be able to cut production in order to ease a global supply the glut.

By the closing bell, West Texas Intermediate futures had lost 2.1% and were heading into the weekend at $48.70 a barrel on NYMEX.

Actiong as a backdrop, the Department of Commerce said US GDP rose 2.9% in the third quarter, after rising 1.4% in the second.

It was the strongest reading since the third quarter of 2014 and beat expectations of 2.5%.

However, the price gauges contained in that same report declined versus the previous quarter, helping to put a bid into bonds.

In parallel, the results of the University of Michigan´s survey of consumer confidence for October revealed that inflation expectations for over the next five to ten years declined from 2.6% to 2.4%.

Thus, the yield on the benchmark two-year US treasury note dropped three basis points to 0.85%.

Looking out the next Fed policy meeting, the US central bank would likely find itself fighting an uphill battle again in 2017 when trying to carry out the two interest rate hikes (on top of a hypothetical 25 basis point move in December) it had guided towards thus far, Morgan Stanley said in a research note sent to clients.

"Those hikes are predicated on an economic outlook we see as likely too optimistic again, which includes an expectation that a late cycle economy re-accelerates to above potential growth while the unemployment rate falls below NAIRU. This lofty outlook we think sets the FOMC up for disappointment and ultimately the delivery of fewer hikes than what policymakers have currently penciled in."

Meanwhile, the market had the opportunity to react to results from technology giants Alphabet and Amazon, who posted their quarterly results after close on Thursday.

Shares in Alphabet, the parent company of Google, finished the session flat as it reported better than expected third quarter earnings as revenue was up 20% to $22.45bn. Analyst had expected the company’s advertising business to decline after a strong second quarter.

Stock in Amazon.com on the other hand tumbled 5.19% as the online retailer missed estimates while expenses surged.

Revenue increased by 29%, in line with expectations, while net income rose to $252m, or 52 cents per share, from $79m last year, below the expected 78 cents.

Shares were down 2.46% in oil company ExxonMobil, which reported a 38% drop in third quarter profit to $2.7bn before the opening bell, while Chevron also reported a decline in earnings due to weak oil prices.

Dow Jones - Risers

Chevron Corp. (CVX) $103.79 3.90%
General Electric Co. (GE) $29.22 2.06%
United Technologies Corp. (UTX) $101.84 1.77%
Home Depot Inc. (HD) $123.58 1.08%
Caterpillar Inc. (CAT) $83.88 1.05%
Cisco Systems Inc. (CSCO) $30.59 0.69%
Travelers Company Inc. (TRV) $108.44 0.38%
Visa Inc. (V) $82.22 0.37%
Procter & Gamble Co. (PG) $86.84 0.30%
Coca-Cola Co. (KO) $42.23 0.26%