Traders work on the floor of the New York Stock Exchange (NYSE) February 12, 2016. REUTERS/Brendan McDermid
NEW YORK: US stock indexes were lower on Friday morning, led by energy shares as a rally in oil prices fizzled out, and as Consumer Price Index (CPI) data indicating firmer inflation trends rekindled prospects of a rate hike this year.
All 10 major S&P sectors were lower. The energy sector fell 1.28%, led by Chevron and Exxon. Consumer discretionary stocks were also hit by weak results from VF Corp and Nordstrom.
Crude prices, which have moved in lockstep with the stock market for much of the year, dropped about 3 percent after a record increase in US stockpiles.
“Seeing a little bit of a pause from the extremes that we’ve been put through over the past several weeks,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve at US Bank in New York.
“Now I think it’s back to “We’re largely past earnings season, we have some political events to be mindful of and the central banks continue to be at the fore”,” he said.
A report showed core consumer price index rose by a bigger-than-expected 0.3% in January, signs of an uptick in price pressures that could allow the Federal Reserve to gradually raise interest rates this year.
While traders are not expecting any increases at this year at all, Fed policymakers appear to be at odds.
Cleveland Fed President Loretta Mester said on Friday rates will likely need to remain accommodative for some time, while other officials maintain that weak inflation and global turbulence are enough to pause on further hikes.
At 9:37am ET (1437 GMT), the Dow Jones industrial average was down 72.39 points, or 0.44%, at 16,341.04.
The S&P 500 was down 9.09 points, or 0.47%t, at 1,908.74 and the Nasdaq Composite index was down 14.95 points, or 0.33%, at 4,472.59.
Consumer stocks, especially retailers, fell after weak results from department store operator Nordstrom and sports apparel maker VF Corp.
The reports follow disappointing holiday-quarter results from Wal-Mart on Thursday, which, along with falling oil prices, snapped a three-day rally on Wall Street.
Nordstrom dropped 9 percent to US$47.97 and VF Corp was down 7.5% at US$55.54.
Applied Materials was up 7.5% at US$18.47 on the chip equipment provider’s buoyant forecast.
Declining issues outnumbered advancing ones on the NYSE by 2,120 to 497. On the Nasdaq, 1,374 issues fell and 771 advanced.
The S&P 500 index showed one new 52-week high and two new lows, while the Nasdaq recorded six new highs and 20 lows. - Reuters
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