US open: Stocks mixed as traders return from holiday
US stocks were mixed on Tuesday as traders returned from a three-day weekend and assessed services data that fell short of estimates.
At 1515 BST the Dow Jones Industrial Average fell 0.06% to 18,479.74 points, the S&P 500 dropped 0.07% to 2,178.63 points and the Nasdaq rose 0.14% to 5,257.07 points. The US market was closed for trading on Monday for Labor Day.
Oil prices declined even after Russia and Saudi Arabia made a vague promise in the previous session of greater cooperation to stabilise the market. Brent crude dropped 2.1% to $46.64 per barrel and West Texas Intermediate fell 2.3% to $44.15 per barrel at 1522 BST.
“Oil has been in the spotlight again over the last 24 hours having rallied more than 5% at one point yesterday when a press conference was called for the Saudi Arabia and Russian oil ministers,” said Craig Erlam, senior market analyst at Oanda.
“The unexpected announcement sparked a sudden belief that a coordinated output freeze may be about to be announced but once again we were left listening to fluffy commitments to cooperation between the two oil producing giants.”
Meanwhile, figures from the Institute for Supply Management showed growth in the US economy’s services sector slipped more than expected in August. The ISM services index fell to 51.4 in August from 55.5 the month before, missing expectations for a reading of 55.0 and hitting its lowest level since February 2010. A reading above 50 indicates expansion.
As of 1535 BST the yield on the benchmark 10-year US Treasury note was down by five basis points to 1.5579%.
Naeem Aslam, chief market analyst at Think Markets, said: “When you see the ISM non-manufacturing number dropping like this, it shakes the floor on which traders are building the hopes that the Fed could increase the interest rate. A few more readings like this and you can say goodbye to interest rate hikes.”
Separately, the Federal Reserve’s labour market conditions index fell back into negative territory in August. The index, which combines 19 labour market indicators, dropped to -0.7 in August from a revised reading of +1.3 in July. Analysts had expected a reading of 0.0.
On the corporate front, General Electric shares fell after it said it has agreed to buy two European 3-D printing companies for $1.4bn.
Seed giant Monsanto gained after German chemical company Bayer sweetened its bid for the group to $127.50 per share from $125 in July.
Chip maker Marvell Technology edged lower after reporting a decrease in quarterly revenue that was worse than forecast.
Enbridge and Spectra Energy rallied after announcing a merger to create the largest energy infrastructure company in the US.