US stocks closed lower Wednesday - in spite of firmer services sector growth - after more strong oil inventories unsettled markets.
The ISM non-manufacturing for April was 55.7, above expectations and rising from March's 54.5 print. A figure above 50.0 denotes expansion in the economy.
But U.S. crude oil futures seesawed and in the end the WTI clung to gains to end up 13 cents, or 0.30%, at $43.78 a barrel. Earlier, weekly EIA crude inventories showed a rise of 2.8 million barrels.
The broad-based S&P 500 closed down 0.6% at 2,051. For all the gains since February's 2016 nadir, the S&P 500 is holding less than 0.3% higher for the year so far, suggesting that uncertainty ahead of the US Presidential election on November 8 is pressuring stocks too.
With Ted Cruz and John Kasich quitting the race to be the Republicans' nominee for President, it looks almost certain that contender Donald Trump faces a challenge-free run to fight for the White House with the Democrats' Hillary Clinton.
The S&P Midcap 400 ended down 0.4% at 1,448 while the S&P Smallcap 600 lost 0.55% to 686 and the wider small-cap Russell 2000 was down 0.77% at 1,113.
Midsession
Wall Street stocks fell at midsession on Wednesday after a bigger-than-expected gain in US crude stocks tempered earlier concerns about reduced output in Canada's oil sands region due to a raging wildfire.
The S&P 500 index was down 0.5% at 2,052, while the S&P Midcap 400 was 0.4% lower at 1,448 and led by energy stocks such as Hollyfrontier (NYSE:HFC) down 9.3% at $31.21, Denbury Resources(NYSE:DNR) down 8.3% at $3.32 and Western Refining (NYSE:WNR) down 7% at $22.69.
The S&P Smallcap 600 was down 0.5% at 686, with Stone Energy Corp (NYSE:SGY) down 13.6% at $0.70.
US crude stocks grew by 2.8mln barrels in the last week, versus expectations of a 1.7mln barrel build, Energy Information Administration data showed. Gasoline stocks also posted a surprise increase.
An earlier report on Tuesday from the American Petroleum Institute said US crude inventories rose by 1.3mln barrels. Stocks in the previous week were already at a record high.
Meanwhile, weekly US crude production figures showed output fell by about 113,000 barrels per day.
The US oil benchmark WTI was down 0.6% at $43.37.
Open
Following the story of the European indices, Wall Street shares headed lower at the open as traders digested earnings reports and economic data on the US economy, which was worse than expected.
As is customary ahead of the closely watched non-farm payrolls on Friday, the private ADP payroll stats were published midweek.
They showed job creation for April at 156,000, which was well short of the 200,000 jobs, which had been expected.
It all feeds into thoughts that the US economy is not exhibiting the pace of growth that some have said exists.
The jobs number on Friday will be closely watched as an indicator on what the Federal Reserve (the US Central bank) may do on interest rates.
In early deals and at the time of writing, the benchmark Dow Jones Industrial Index was down over 52 points at 17,698, while the S&P500 shed over eight at 2,054. The tech heavy Nasdaq was down 16 at 4,746.
Broadcaster and media behemoth Time Warner Inc (NYSE:TWX) shares headed north after the firm posted profits and revenue for its first quarter, which beat Wall Street's expectations.
Computer firm Cray (NYSE:Cray) was a big loser, shedding over 24% on Nasdaq as first quarter results failed to impress.
Pre-open
Wall Street shares are seen opening lower midweek after a lower finish yesterday thanks to weak Chinese data and depressed oil prices.
At the time of writing on Wednesday, European indices are also lower, with the FTSE100 down over 78 points and the German DAX down over 68 points. In France, the CAC 40 is over 28 lower.
Big news in the US is that Republican and controversial figure Donald Trump has now become the presumptive presidential nominee after Ted Cruz dropped out.
On Wall Street, the benchmark Dow Jones closed Tuesday 140 points down at 17,750, while the tech heavy Nasdaq ended over 54 down at 4,763.
The broader-based index S&P500 finished down more than 18 points to stand at 2,063.
Futures trading, meanwhile, shows the Dow heading further lower, down 115 points; the S&P500 15.25 lower and the Nasdaq trailing over 32 points lower.
Investors will once again be kept busy by corporate earnings analysis today, with several big names expected to report.
They include, ahead of the bell, the brewer Anheuser-Busch InBev and global oil titan Royal Dutch Shell (NYSE: RDSA, LON:RDSB).
Time Warner (NYSE: TWX), which owns CNN, is also reporting heavily anticipated results this morning, with shares up 0.72% in after-hours trading.
Meanwhile after the bell is closely followed electric car manufacturer Tesla (NASDAQ:TSLA) and Marathon Oil (NYSE: MRO).