Wall Street switched to losses in Wednesday afternoon trade as crude oil prices turned negative.
At 3:35 p.m. in New York, the Dow Jones Industrial (INDEXDJX:.DJI) was down 0.3% at 17,520.13. The S&P 500 (INDEXSP:.INX) fell 0.6% to 2,052.92. The Nasdaq Composite (INDEXNASDAQ:.IXIC) tumbled 1.3% to 5,028.94.
West Texas Intermediate crude futures, the U.S. oil benchmark, settled at $37.16 a barrel, down 35 cents, or 0.93%. Oil prices settled lower after traders and investors ignored an unexpected drawdown in U.S. crude stockpiles.
Stocks opened higher in morning trading after reports that chemical heavyweights DuPont (NYSE:DD) and Dow Chemical (NYSE:DOW) are in advanced talks to merge.
Mid-session wrap
With the oil price revival running out of steam, equities were in a down phase over the lunchtime period, surrendering early gains.
Despite strong support from DuPont, up 8.1% on speculation it plans to merge with Dow Chemical, the Dow Jones was off just shy of a hundred points at 17,468, while the broader-based S&P 500 was down 20 points at 2.043.
The tech-heavy Nasdaq Composite was hardest hit of all, shedding 86 points at 5,012, weighed down by sluggish Apple shares and disappointment that Yahoo! (NASDAQ:YHOO) will not be hiving off its stake in Chinese e-commerce behemoth Alibaba.
The Energy Information Agency reported a welcome decline in US crude oil stockpiles, but this was offset by an unlooked for surge in distillate inventories.
Among the minnows, Fusion Telecommunications (NASDAQ:FSNN) rocketed 80% higher after it acquired Fidelity Voice and Data for US$28.5mln.
In contrast, rental and leasing outfit Essex Rental (NASDAQ:ESSX) lost a third of its value after it announced it was giving up the ghost and cancelling its listing on Nasdaq.
US open
Recovering oil prices have given US markets a lift, along with merger speculation surrounding Dow Chemical and DuPont.
The Dow Jones raced to a 191 point gain in the first hour at 17,759, helped by a near 11% gain for DuPont (NYSE:DD) on reports it is mulling a merger with Dow Chemical (NYSE:DOW).
The broader-based S&P 500 could not manage to match the Dow's 1% gain, but still outperformed the tech-heavy Nasdaq Composite; the S&P was up 14 points (0.7%) at 2,078 while the Nasdaq was up 0.1%, or four points, at 5,103.
Among the smaller players, helicopter operator CHC Group (NYSE:HELI) achieved lift-off after well-received second quarter results.
The shares elevated 23.6% to US$0.2147 as investors took heart at the continued execution of its cost reduction efforts.
SunEdison (NYSE:SUNE) was a bright sport, advancing 16,4% to US$0.565 after being awarded a large solar power contract by the city of San Diego.
Investors bailed out of TCP International (NYSE:TCPI), however, as Lundin Law launched a class action lawsuit against the company, which last month saw its shares slump after an audit committee investigation into its accounts.
Pre-open
Spread betting quotes are sending out mixed signals for US markets, with the Dow tipped to rise and the S&P heading for a small fall.
Merger speculation is placing a floor under the Dow Jones average. The big rumor in the market concerns giants Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD), which are reportedly mulling a merger.
The Dow Jones is tipped to open around 10 points up from last night’s close of 17,568 but the S&P 500 is seen easing to around 2,062 from 2,-064 last night.
Oil stocks have been weighing down the indexes this week so this afternoon’s release of crude oil stockpiles by the Energy Information Administration will be viewed with extra interest.
Oil prices have been rallying a little this morning, helped by the release of stockpiles data from the API last night.
“The API inventory stats coming out after the close [last night] were modestly helpful, showing a draw of 1.6m barrels and crude is up about 50 cents this morning. Even positive news from the EIA, again downgrading US production estimates couldn’t rally the market which remains very nervous,” suggested oil analyst Malcolm Graham-Wood.
Ahead of the market open, traders are keeping an eye out for a trading update from sportswear maker Lululemon Athletica (NYSE:LULU)