US top-line stocks recouped losses but it was mid- and small-cap stocks which managed to edge into gains at the close on Friday after oil prices staged a late-session rally.
Investors were anxious ahead of a Federal Reserve symposium next week which may reveal more about the timing of any US interest rate hike, while the steel sector reeled from China’s failure so far to curb output.
But oil prices, which were flat at mid-session, rallied late in the session. The West Texas Intermediate was up 0.6% to $48.50.
That helped the market bellwether S&P 500 to narrow its losses and end down 0.1% at 2,183 – just three points adrift of where it began the week on Monday.
Meanwhile, the S&P Midcap 400 closed up 0.1% at 1,562 and the S&P Smallcap 600 was flat at 748.
Under the Kansas City Fed’s auspices, the 2016 Economic Symposium, "Designing Resilient Monetary Policy Frameworks for the Future," will take place Aug. 25-27 at Jackson Hole in Wyoming.
Midsession
Wall Street shares nursed losses at midsession on Friday as investors began to fret over what next week’s Federal Reserve symposium might reveal about the pace of possible rate hikes while steelmakers sank after China failed to curb supplies.
The worries were doubled this week after New York Fed, and Fed Chair Janet Yellen’s right-hand man William Dudley said markets had grown too complacent about a no hike strategy. He said a September hike was back on the table.
Although minutes from the July Fed meeting showed policymakers were divided, Dudley’s comments were more recent and investor began to reassess the situation to the hawkish side.
The S&P 500 index was down 0.3% to 2,181, while the S&P Midcap 400 lost 0.2% to 1,558 and was led lower by United States Steel Corp (NYSE:X) down 6.4% to $20.41.
China is the world’s biggest steelmaker – producing 50% of global supplies in 2015. China was reported on Friday to be leaning on local governments and state companies to cut crippling overcapacity in the coal and steel sectors as many provinces languish far behind schedule.
Beijing has struggled to make localities share the burden of pledged cuts and faces a tough task if it is to reduce coal capacity by 250m tonnes and steel by 45mln tonnes as targeted by the end of the year.
The S&P Smallcap 600 was 0.2% lower at 747 and led lower by Olympic Steel Inc (NASDAQ:ZEUS) down 15.1% to $21.75 and AK Steel Holding Corp (NYSE:AKS) down 8.5% to $4.73.
Oil was fairly neutral to the bourse, as the West Texas Intermediate was flat at $48.22.
Pre-Open
A dull end to the week is in store, with the main benchmarks tipped to open lower.
The S&P 500 is trading at around 2,180 on spread betting platforms, some seven points down from last night’s close.
The Dow Jones average is being quoted at 18,542, down 56 points from last night’s close.
European markets are providing no encouragement with the Footsie in London and the Dax in Frankfurt both drifting lower.
The oil price has found reverse gear again with West Texas sweet light crude down 0.4% at US$48.05 a barrel, although the European benchmark, Brent crude for October delivery, has kept its head above the $50 mark at US$50.54 a barrel, down 35 cents.
There is not much point looking to the gold bullion market for profits, either, as the price of the December futures contract for the yellow metal was off 0.9% at US$1,344.70 an ounce.
On the corporate news front Estée Lauder Companies Inc (NYSE:EL) disappointed the market with its outlook for the new business year.
The cosmetics company was off 2.8% in pre-market trading.