MARKET SNAPSHOT: Stock Market Turns South, As Financial Slump Takes Toll On Wall Street

By Mark DeCambre and Barbara Kollmeyer, MarketWatch Features Dow Jones Newswires

Oil prices under fresh pressure, with a trade below $48 a barrel feared for West Texas Intermediate

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U.S. stock-index gauges on Wednesday turned decidedly lower in late-morning trade on the last trading day of the month, as a slump in bank shares and a lackluster reading of economic reports weighed on investor sentiment.

Investors also were awaiting the Federal Reserve's anecdotal report on economic conditions at its districts, known as the Beige Book.

The S&P 500 index , fell 7 points, or 0.3%, at 2,406, with the financial sector, down 1.3%, representing the worst performer among the broad-market gauge's 11 sectors. The Dow Jones Industrial Average was trading 61 points, or 0.3%, lower at 20,965, with shares of J.P. Morgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), dragging blue chips firmly into the red. Combined, the pair of bank stocks were contributing the lion's share of the Dow's loss.

The Nasdaq Composite Index , meanwhile, after briefly touching an intraday high of 6,221.99, was trading 29 points, or 0.5%, lower at 6,173.

The benchmarks took a turn for the worst after a reading for pending-home sales came in worse than expected. Pending-home sales (http://www.marketwatch.com/story/pending-home-sales-decline-again-deepening-housing-market-funk-2017-05-31)from the National Association of Realtors fell 1.3% to a level of 109.8 from a reduction in the March reading. Meanwhile, a gauge of economic health, the Chicago business barometer, or Chicago PMI, fell to 55.8 in May from a 28-month high of 58.3 in April (http://www.marketwatch.com/story/economy-shifts-to-merely-fast-from-furious-in-chicago-area-pmi-finds-2017-05-31), MNI Indicators said Wednesday. Any reading over 50 indicates improving conditions.

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"I think what we are seeing some reaction to weakness in Chicago PMI and pending home sales coming in worse than expected," said Colin Cieszynski, chief market strategist at CMC Markets.

Cieszynski said that market may be at a tipping point where a trend of soft data may support bearish views that the economy is stalling.

"People are looking for reasons to buy, but it doesn't take a lot for markets to tumble back," he said. "I think some traders are starting to throw in the towel."

Need to know:Tech rally overdone? The case for buying other stock sectors now (http://www.marketwatch.com/story/tech-rally-overdone-the-case-for-buying-other-stock-sectors-now-2017-05-31)

With one session remaining in May, the Nasdaq has been the best-performing major index for the month, up 2%, followed by a 0.9% gain for the S&P 500. Both indexes are set for their best monthly percentage gains since February 2017. The Dow is hanging on to a meager gain of less than 0.1%.

U.S. stocks finished modestly lower on Tuesday driven by losses for energy shares, which continued their trend lower Wednesday, with U.S. crude-oil prices threatening to trade below $48 a barrel.

Read:This money manager sees no end in sight for bull market (http://www.marketwatch.com/story/this-money-manager-sees-no-end-in-sight-for-bull-market-2017-05-30).

Data reports: The Federal Reserve's Beige Book is due at 2 p.m. Eastern.

Among Fed speakers, San Francisco Fed President John Williams will give a speech on "global economic and financial challenges" at the Bank of Korea International Conference 2017 in Seoul, South Korea at 8:10 p.m. Eastern.

Stocks to watch: Shares of Michael Kors Holdings Inc.(KORS) dropped 9% in after maker of high-end accessories and clothing posted a loss for its fiscal fourth quarter (http://www.marketwatch.com/story/michael-kors-shares-slide-7-premarket-after-company-swings-to-loss-2017-05-31) and spoke of a challenging market.

Vera Bradley Inc.(VRA) was trading 5.5% higher, despite a weak quarterly report.

Other markets: Stocks in Asia had a mixed day, while Chinese equities inched higher after a gauge of manufacturing beat forecasts (http://www.marketwatch.com/story/chinas-manufacturing-beats-forecast-stays-steady-2017-05-30). European stocks traded higher. The FTSE 100 index also showed solid gains, tilting higher after trading in the red on fresh parliamentary election jitters (http://www.marketwatch.com/story/theresa-may-could-lose-majority-in-uk-election-fresh-research-finds-2017-05-31).

The pound was trading around $1.28 (http://www.marketwatch.com/story/pound-falls-again-after-pollster-predicts-may-will-lose-majority-in-election-2017-05-31), in up-and-down trade for sterling ahead of the coming U.K. election.

Gold prices were trading higher as the dollar slumped 0.3%, giving runway for assets priced in the currency.

(END) Dow Jones Newswires

May 31, 2017 10:36 ET (14:36 GMT)