Wall Street extended losses on Wednesday, the last trading day of August, as lower oil prices weighed on energy stocks.
Oil prices fell 2.5 percent after U.S. government data showed a large unexpected weekly build in U.S. crude and distillate stockpiles and a smaller-than-expected draw in gasoline. [O/R]
Oil was also pressured by the dollar index .DXY, trading at a three-week high. The S&P 500 energy index .SPNY plunged 1.6 percent as Exxon Mobil (XOM.N) and Chevron (CVX.N) fell 1 percent. Exxon was the top drag on the S&P 500 and Chevron on the Dow.
Materials .SPLRCM, which includes companies with large overseas operations, was off 0.92 percent.
“I think people are too focused on transitory events and that’s what is causing these ups and downs in oil prices,” said John Conlon, chief equity strategist at People’s United Wealth Management.
Investors are also looking at the upcoming U.S. nonfarm payrolls data on Friday which could provide clues on the timing of the next interest rate hike.
The markets have been playing a guessing game on when the Federal Reserve would be able to raise rates after top Fed officials, including Chair Janet Yellen, turned hawkish on the back of slow but steady economic growth.
A smaller-than-expected drop in private payrolls numbers boosted investor optimism about Friday’s jobs report which includes both private and public sector employment.
Traders have priced in a 27 percent chance of a rate increase in September and a 54.4 percent chance in December, according to CME Group’s FedWatch tool.
At 11:04 a.m. ET, the Dow Jones industrial average .DJI was down 63.66 points, or 0.34 percent, at 18,390.64.
The S&P 500 .SPX was down 8.26 points, or 0.38 percent, at 2,167.86.
The Nasdaq Composite .IXIC was down 17.13 points, or 0.33 percent, at 5,205.86.
The S&P 500 is on track to mark its sixth straight month of gains and the Dow its fifth month. All three major indexes closed at records levels on Aug. 11, the first time since 1999.
Palo Alto (PANW.N) dropped 7.8 percent to $132.20 after the cyber security firm forecast current-quarter profit and revenue below analysts’ estimates.
H&R Block (HRB.N) was the top percentage loser on the S&P 500, falling 13 percent after the U.S. tax preparer reported quarterly revenue that missed analysts’ expectations by a large margin.
Declining issues outnumbered advancing ones on the NYSE by 1,976 to 834. On the Nasdaq, 1,913 issues fell and 706 advanced.
The S&P 500 index showed 12 new 52-week highs and one new low, while the Nasdaq recorded 68 new highs and 15 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)