US stocks edged lower on Wednesday after oil prices sagged on supply data.
The S&P 500 market bellwether ended down 0.06% at 2,125, while the S&P Midcap 400 lost 0.3% to 1512 and the S&P Smallcap 600 shed 0.4% to 732.
While the technology sector led the way higher, with heavyweight Apple (NASDAQ:APPL) jumping 3.5% to $111.77, while the Russell 2000 small-cap index was dominated by a gain of 157% to $20.85 by Vitae (NASDAQ:VTAE) after Allergan (NYSE:AGN) offered to snap it up, it was the energy sector, which dragged the tickers lower for the second successive session amid a further drop in the oil price after official EIA data was released.
West Texas Intermediate, the US oil benchmark, fell 2.9 per cent on Tuesday to $43.62 a barrel.
Midsession
US stocks edged into the red at midsession on Wednesday as oil prices extended their decline after official supply data was released.
Earlier buoyed by news of Allergan’s (NYSE:AGN) takeover overtures to Vitae (NASDAQ:VTAE) gains by the bourse were never that convincing and it wouldn’t take a lot to drag prices down.
The S&P 500 market bellwether was down 0.6% to 2,125 while the S&P Midcap 400 was down 0.1% at 1515. The S&P Smallcap 600 lost 0.1% to 734.
The US oil benchmark, the West Texas Intermediate, was 2.8% lower at $43.64, its lowest level this month.
Oil prices fell about 2 percent on Wednesday as data showing large weekly builds in U.S. petroleum products offset a surprise draw in crude stockpiles.
The US Energy Information Administration reported that crude inventories fell 559,000 barrels during the week ended Sept. 9. Analysts had expected a build of 3.8mln barrels.
But the EIA also reported that inventories of distillates, which include diesel and heating oil, rose by 4.6 million barrels in the week to Sept. 9, versus analysts' expectations of an increase of 1.5mln barrels. That build weighed on broader market sentiment, forcing crude futures to reverse gains.
Open
US stocks firmed on Wednesday, rewinding from the previous day’s falls as the see-saw gyrations of the market continued for a third day, with a pharma takeover lighting up screens.
After Fed officials’ comments on Monday pared back Sept 21 US interest rate rise risks, oil prices came off on Tuesday and the market reversed Monday’s rally.
The S&P 500 market bellwether was up 0.2% at 2,131 and led by drugs group Allergan (NYSE:AGN) up 2.8% at $246.79.
Allergan agreed on Wednesday to acquire Vitae Pharmaceuticals Inc. (NASDAQ:VTAE), up 158.64% at $20.94 in a deal valued at about $639mln. Under the terms of the deal, Allergan will pay $21 per Vitae share in cash. The deal will strengthen Allergan's dermatology product pipeline, adding a treatment for psoriasis and other autoimmune disorders, as well as a treatment for atopic dermatitis.
Nasdaq’s highest riser was Apple Inc (NASDAQ:AAPL) up 3.3% at $111.56 after reports in Digitimes that chip orders for the new iPhone 7 are higher-than-expected, versus the overall ticker’s 0.6% gain to 5,188.
Viacom Inc (NASDAQ:VIAB) was right behind with a 3.1% gain to $37.92.
The S&P Midcap 400 was up 0.3% at 1522 while the S&P Smallcap 600 was up 0.3% at 736 and led by chemicals group Chemours Company (NYSE:CC) up 5.4% to $13.40.
The wider small-cap Russell 2000 index, was flat at 1,212 but that disguised the top mover – unsurprisingly Vitae.
Pre-Open
US shares are poised for a steadier start after a chaotic few days with futures pointing higher.
Taking the cue from European markets perhaps, the Dow Jones is 25 ahead; the S&P500 is up over four points, while the Nasdaq exchange is ahead by 14.
It comes after stocks on Wall Street plunged yesterday, the Dow finishing 258 lower and the Nasdaq down 56 at 5,155. The broader S&P500 shed 32 at 2,127. Sentiment is also being affected by the question of whether the Fed will or will not be raising interest rates on September 21 as well as the health or otherwise of the Democrat presidential candidate.
US crude is again down today, by 0.62% at US$44.62 a barrel.
On Tuesday West Texas Intermediate, the US crude marker, settled 3 per cent lower at $44.90 a barrel.
The decline was sparked by a report from the International Energy Administration that said that the global oil glut would persist into 2017.
On the cards today, among other things, investors will be continuing to watch Herbalife (NYSE:HLF) shares, which went north in extended trading, after billionaire investor Carl Icahn said he wants to more than double his investment. In pre-market, shares gained 3.45% to stand at US$61.8