Wall Street opens lower as energy stocks weigh

Exxon with Chevron hit as oil prices fall owing to increases in Opec production and additions to US oil rig numbers. — Reuters file pic
Exxon with Chevron hit as oil prices fall owing to increases in Opec production and additions to US oil rig numbers. — Reuters file pic

NEW YORK, Aug 1 — US stocks were slightly lower today as a drop in oil prices weighed on energy stocks.

Oil prices fell 1.9 per cent due to increases in Opec production and US oil rig additions. Oil majors Exxon and Chevron were down 1.5 per cent and 1.1 per cent, respectively.

The S&P 500 index hit a new intra-day high on Friday for the seventh time in a month, while the Nasdaq ended July with a rise of 6.6 per cent.

Growth in US gross domestic product in the second quarter came in below expectations, fuelling speculation that the Federal Reserve may not pull the trigger on interest rates anytime soon.

The chance of a hike by the end of the year fell to about 33 per cent after the GDP numbers were released, according to CME Fedwatch, from about 50 per cent early last week.

“After the GDP data that we saw last week, the Fed will definitely skip September,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

“However, the underlying strength of the economy is strong as evidenced by the robust consumer spending numbers. August though generally tends to be a wishy-washy month, and the market is expected to move mainly on economic news.”

At 9:44am ET (1344 GMT), the Dow Jones industrial average was down 28.76 points, or 0.16 per cent, at 18,403.48, the S&P 500 was down 3.48 points, or 0.16 per cent, at 2,170.12 and the Nasdaq Composite was up 0.75 points, or 0.01 per cent, at 5,162.88.

Seven of the 10 major S&P sectors were lower, with the energy index’s 1.71 per cent fall leading the decliners.

Diamond Offshore fell 3.5 per cent to US$21.92 after posting a drop in revenue.

SolarCity fell 5.8 per cent to US$25.16, reversing from premarket gains, after Tesla said the two companies have agreed to merge. Tesla was down 1.7 per cent at US$230.80.

AMC Entertainment was down 4.9 per cent at US$27.99 after the movie theater chain’s second-quarter results missed expectations.

Fleetmatics jumped 39.1 per cent to US$59.71 after Verizon said it would buy the GPS vehicle tracking company for about US$2.4 billion (RM9.6 billion). Verizon was up marginally at US$55.52.

Declining issues outnumbered advancing ones on the NYSE by 1,757 to 929. On the Nasdaq, 1,282 issues fell and 1,074 advanced.

The S&P 500 index showed 17 new 52-week highs and no new low, while the Nasdaq recorded 38 new highs and seven new lows.  — Reuters