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Stocks wobble as investors hope for cuts in oil production Stock market turns lower after cautious view from the Fed
(about 2 hours later)
NEW YORK — Stocks are wavering Wednesday after shaking off early losses. The price of oil is climbing for the second consecutive day, sending energy companies higher. The Federal Reserve is holding its first meeting of the year and investors are waiting to see what it says about interest rates and the economy. NEW YORK — The stock market turned lower in afternoon trading after the Federal Reserve issued a cautious assessment of the U.S. economy in its latest policy statement. Technology companies fell sharply after Apple said iPhone sales were slowing and that it expected its first quarterly sales decline in 13 years. Energy stocks gained after the price of oil rose. Investors hoped that crude production would be cut, helping to alleviate a global glut of oil.
KEEPING SCORE: The Dow Jones industrial average lost 6 points to 16,161 as of 1:23 p.m. Eastern time. The Standard & Poor’s 500 index picked up 5 points, or 0.3 percent, to 1,908. The Nasdaq composite index, which has a high concentration of tech stocks, fell 25 points, or 0.5 percent, to 4,542. KEEPING SCORE: The Dow Jones industrial average fell 274 points, or 1.7 percent, to 15,891 as of 3:14 p.m. Eastern time. It was up slightly shortly before the Fed’s statement was released at 2 p.m. Eastern time. Steep declines in Apple and Boeing, which released a disappointing forecast, accounted for much of the Dow’s decline.
Stocks fell early in the day as energy prices slipped and Apple and Boeing took big losses. The Dow fell as much as 179 points. The price of oil has recovered and is adding to its gains from Tuesday. The Standard & Poor’s 500 index fell 30 points, or 1.6 percent, to 1,873. The Nasdaq composite, which has a high concentration of tech stocks, fell far more than the other two indexes, giving up 113 points, or 2.5 percent, to 4,454.
OIL PRICES: Crude rose as investors hoped for cuts in fuel production. On Wednesday the head of Russia’s state oil pipeline monopoly said talks with OPEC and Saudi Arabia are in the works. Oil prices have plunged over the last year and a half because global supply is outstripping demand, creating a gigantic fuel glut. THE FED: The Federal Reserve said it was closely watching developments in the global economy and financial markets and how they might pressure the U.S. economy. It also said U.S. economic growth had slowed. Since the Fed’s last meeting in December, oil prices have plunged, stocks have swung wildly, and investors have become more concerned that China’s huge economic engine, a major driver of global growth, is sputtering. As expected, the Fed left its benchmark interest rate unchanged, after raising it for the first time in nearly a decade in December.
Benchmark U.S. crude rose 65 cents or 2.1 percent, to $32.10 a barrel in New York. Brent crude, the benchmark for international oils, rose $1.06, or 3.3 percent, to $32.86 $33.34 a barrel in London. Oil prices also increased about 4 percent on Tuesday. THE QUOTE: David Chalupnik, head of equities for Nuveen Asset Management, said investors hope that the Fed will move slowly in making future interest rate increases. Chalupnik, speaking shortly before the Fed released its latest policy statement, said he thinks the Fed will raise its key rate only one time this year, at its policy meeting in June.
ENERGY STOCKS: Chevron gained $1.01 to $85.13 and Exxon Mobil rose 22 cents to $76.92. Despite a weak fourth-quarter report, oil and gas company Hess climbed after it said it will make even deeper cuts in spending. Earlier this week Hess said it would slash capital spending by 40 percent in 2016. Hess added $3.57, or 10.3 percent, to $38.38. “They should be backing off their intended path at this point,” he said, because economic growth in the U.S. has slowed a little.
FED PLANS: The Federal Reserve will wrap up its latest policy meeting Wednesday afternoon. In December it raised its main interest rate above zero, where it had been since 2008. Since then stocks have dropped, as have oil prices. That’s partly because investors are worrying about the global economy as growth in China slows down. OIL: The price of crude rose as investors hoped for cuts in fuel production. On Wednesday the head of Russia’s state oil pipeline monopoly said talks with OPEC and Saudi Arabia are in the works. Oil prices have plunged over the last year and a half because global supply is outstripping demand, creating a gigantic fuel glut.
At one time the Fed was expected to raise interest rates last September, but it held off and said market turmoil was one reason for that decision. Higher interest rates would tend to make the dollar even stronger, which makes imports cheaper but makes U.S. goods more costly in other countries. Benchmark U.S. crude rose 85 cents, or 2.7 percent, to close at $32.30 a barrel in New York. Brent crude, the benchmark for international oils, rose $1.30, or 4.1 percent, to $31.10 a barrel in London. Oil prices also increased about 4 percent on Tuesday.
BIOGEN BOUNCES: Biotech drugmaker Biogen rose after its fourth-quarter earnings were stronger than expected. It added $22.56, or 8.7 percent, to $282.43. APPLE CORED: Apple slumped after it said growth in iPhone sales slowed in the fourth quarter. It also predicted a revenue decline in the current quarter, something that hasn’t happened since 2003. CEO Tim Cook said the strong dollar is hurting sales. The stock gave up $5.88, or 5.9 percent, to $94.11.
APPLE CORED: Apple slumped after it said growth in iPhone sales slowed in the fourth quarter. It also predicted a revenue decline in the current quarter, something that hasn’t happened since 2003. CEO Tim Cook said the strong dollar is hurting sales. The stock gave up $4.27, or 4.3 percent, to $95.72. BIOGEN BOUNCES: Biotech drugmaker Biogen rose after its fourth-quarter earnings were stronger than expected. It added $17.57, or 6.8 percent, to $277.44.
The loss hurt tech stocks, which were slightly lower Wednesday afternoon. GROUNDED: Aerospace and defense giant Boeing fell after its 2016 outlook came up short of analyst projections. Textron, which makes Cessna planes and Bell helicopters, also tumbled after its fourth-quarter profit and sales disappointed investors. Boeing stock lost $10.79, or 8.4 percent, to $117.22 and Textron fell $4.88, or 11.9 percent, to $33.25.
GROUNDED: Aerospace and defense giant Boeing fell after its 2016 outlook came up short of analyst projections. Textron, which makes Cessna planes and Bell helicopters, also tumbled after its fourth-quarter profit and sales disappointed investors. Boeing stock lost $9.34, or 7.3 percent, to $118.67 and Textron fell $3.78, or 10 percent, to $33.95. MORE MCMORAN: Freeport-McMoRan continued to climb, picking up 46 cents, or 11 percent, to $4.66. The copper and energy company rose almost 7 percent Tuesday after it announced plans to cut spending and production and eliminate more jobs. Activist investor Carl Icahn also disclosed he bought a stake in the company. The stock traded above $18 a year ago.
MORE MCMORAN: Freeport-McMoRan continued to climb, picking up 73 cents, or 17.4 percent, to $4.93. The copper and energy company rose almost 7 percent Tuesday after it announced plans to cut spending and production and eliminate more jobs. Activist investor Carl Icahn also disclosed he bought a stake in the company. TUPPERWARE PARTY CANCELED: Tupperware’s fourth-quarter profit and sales fell far short of estimates, and its stock shed $7.50, or 14.6 percent, to $43.98.
The stock traded above $18 a year ago. TOTAL SYSTEM SLIDES: Electronic payment services provider Total System Services fell $6.89, or 15 percent, to $39.11 after its earnings fell short of estimates and it gave a weak profit forecast.
TUPPERWARE PARTY CANCELED: Tupperware’s fourth-quarter profit and sales fell far short of estimates, and its stock shed $6, or 11.7 percent, to $45.48. CURRENCIES: The euro rose to $1.0899 from $1.0853 and the dollar rose to 118.74 yen from 118.46 yen.
TOTAL SYSTEM SLIDES: Electronic payment services provider Total System Services fell $5.70, or 12.4 percent, to $40.30 after its earnings fell short of estimates and it gave a weak profit forecast. METALS: Gold fell $4.40 to $1,115.80 an ounce. Silver lost 10.5 cents to $14.459 an ounce. Copper gained 2.65 cents, or 1.3 percent, to $2.064 a pound.
BONDS, CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.05 percent from 2 percent. The euro rose to $1.0875 from $1.0853 and the dollar rose to 118.92 yen from 118.46 yen. OTHER ENERGY TRADING: Wholesale gasoline slipped to $1.0457 a gallon. Heating oil rose 5.8 cents, or 5.9 percent, to $1.025 a gallon. Natural gas added 0.9 cents to $2.189 per 1,000 cubic feet.
OVERSEAS: France’s CAC-40 added 0.5 percent while Germany’s DAX rose 0.6 percent. Britain’s FTSE 100 was 1.3 percent higher. The Shanghai Composite Index slid 0.5 percent, adding to Tuesday’s 6.4-percent loss. Japan’s Nikkei 225 rose 2.7 percent and Hong Kong’s Hang Seng was up 1 percentOVERSEAS: France’s CAC-40 added 0.5 percent while Germany’s DAX rose 0.6 percent. Britain’s FTSE 100 was 1.3 percent higher. The Shanghai Composite Index slid 0.5 percent, adding to Tuesday’s 6.4-percent loss. Japan’s Nikkei 225 rose 2.7 percent and Hong Kong’s Hang Seng was up 1 percent
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Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jayMarley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.