Wall Street drops as weak oil weighs on energy shares

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Wall Street was down on Wednesday as weak oil prices weighed on energy stocks, a day after the S&P 500 and the Nasdaq hit record highs.

Oil prices fell 1.36 percent in choppy trading after the U.S. government reported a surprise crude stockpile build. [O/R]

The S&P 500 energy index .SPNY fell 0.78 percent. Exxon Mobil’s (XOM.N) 1.2 percent drop was the top drag on the S&P 500 and the Dow.

A rally since late June has left the S&P up nearly 7 percent in 2016, as expectations of continued low interest rates encourage investors to buy into equities. The benchmark index has hit four record intraday highs this month.

However, trading was low on Wednesday in the absence of market-moving information in a traditionally low volume season.

“Low volume is fairly standard at this time of the year and August tends to be a very choppy month,” said Quincy Krosby market strategist at Prudential Financial. “If you have low volumes, it could skew the market in any direction, and that’s what you have today.”

Trading volumes have been near year-lows since Monday as the second-quarter earnings season winds down.

The dollar index .DXY fell for the second straight day as weak U.S. productivity data on Tuesday somewhat dimmed the prospects of economic growth and would likely deter the Federal reserve from raising interest rates.

At 11:26 a.m. ET (1526 GMT), the Dow Jones Industrial Average .DJI was down 41.64 points, or 0.22 percent, at 18,491.41.

The S&P 500 .SPX was down 6.62 points, or 0.3 percent, at 2,175.12.

The Nasdaq Composite .IXIC was down 26.66 points, or 0.51 percent, at 5,198.82.

Six of the 10 major S&P 500 indexes were lower.

Shares of Walt Disney (DIS.N) rose 2.2 percent to $98.75, after the company reported results overnight and bought a 33 percent stake in video-streaming firm BAMTech. The stock provided the biggest boost to the S&P 500 and the Dow.

SunPower (SPWR.O) shares sank 30 percent after the company swung to a second-quarter loss, lowered its full-year revenue forecast and said it would reorganize its business.

Perrigo (PRGO.N) dropped 11 percent to $85.05 after the company reported a lower-than-expected profit and slashed its earnings forecast.

JD.com (JD.O) jumped 8.6 percent to $24.28 after the company reported revenue within its forecast. The stock gave the biggest boost to the Nasdaq.

Declining issues outnumbered advancing ones on the NYSE by 1,656 to 1,153. On the Nasdaq, 1,815 issues fell and 842 advanced.

The S&P 500 index showed 17 new 52-week highs and two new lows, while the Nasdaq recorded 58 new highs and 23 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)


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