Adobe rallies after earnings beat forecasts
U.S. stocks put in a mixed performance Wednesday as investors focused on volatile oil prices, which resumed their slide as traders looked past a decline in crude inventories to focus on a rise in domestic production.
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The S&P 500 index fell 2 points, or 0.1%, 2,434, with nine of the 11 main sectors trading lower. A drop in oil prices put pressure on energy shares, which were down 1.6%. Heath-care and technology shares were the only sectors in the green, up 1.1% and 0.5% respectively.
Some analysts believe that oil is likely to trade in a $30-$60 a barrel range for the rest of the year, as the U.S. producers continue to increase production.
"Even if production levels moderate a bit, slowing demand will keep inventories swollen until we enter the winter heating season. What we have learned over the past year is that prices over $50 brings with it a surge in production," said James Meyer, chief market strategist at Tower Bridge Advisors, in a note.
The Dow Jones Industrial Average lost 48 points, or 0.2%, to 21,429, with more than half of the blue-chip stocks trading lower. Caterpillar Inc(CAT) and Chevron Corp(CVX) were the top decliners, down 2.4% and 1.7% respectively.
The tech-heavy Nasdaq Composite Index was up 36 points, or 0.6%, to 6,224. Over the past two weeks, the Nasdaq has suffered sharp losses on concerns that high-value tech industry stocks are in a bubble.
Some analysts said that the bull market appears to be intact despite recent selloff in technology shares.
"Technology takes a breather for the first time in a while? That's okay because other sectors are there to grab the bull by the horns," said Andrew Adams, market strategist at Raymond James, in a note to clients.
Adams wrote that mild consolidation in the S&P 500 after it hit what could be significant resistance is a sign of strength.
"This kind of action is exactly what we want to see in a bull market and strengthens our belief that we are not approaching the end of it," Adams wrote.
Oil blues: Earlier, comments from Iran's oil minister about the possibility of deepening production cuts appeared to help crude-oil futures in early trade, but modest gains turned into losses.
Crude-oil prices, which entered bear-market territory after falling 20% on Tuesday, fell by more than 1% after data showing a decline in inventories but a rise in domestic production. Crude oil fell 2.1% to $43.56 a barrel.
Stocks to watch: Shares of Red Hat Inc.(RHT) jumped 10% after the open-source software company late Tuesday posted earnings ahead of forecasts (http://www.marketwatch.com/story/red-hat-jumps-to-highest-price-levels-since-dot-com-boom-2017-06-20).
Shares of Twitter Inc. (TWTR) jumped 5.5%, lifting the stock above both its widely-watched 50-day and 200-day moving averages in one fell swoop. Based on current trajectories, the 50-day average is on course to cross above the 200-day average in about a week, a bullish technical event known as a "golden cross." (http://www.marketwatch.com/story/twitters-stock-surges-in-active-trade-a-week-before-bullish-golden-cross-pattern-appears-2017-06-21)
Adobe Systems Inc.(ADBE) climbed 3.3% ahead of the bell. The software company late Tuesday beat Wall Street forecasts with record quarterly revenue (http://www.marketwatch.com/story/adobe-rises-to-record-levels-after-beating-earnings-expectations-2017-06-20).
La-Z-Boy Inc.(LZB) surged 18% following better-than-expected earnings (http://www.marketwatch.com/story/la-z-boy-stock-rallies-on-companys-q4-earnings-sales-beat-2017-06-20) on Tuesday after market close.
Shares of Advanced Micro Devices Inc.(AMD) picked up 2.1% after the chip maker on Tuesday launched a new generation of chips (http://www.marketwatch.com/story/amd-launches-new-epyc-chips-in-direct-challenge-to-intel-2017-06-20) for the servers that drive computing in data centers, seen as a direct challenge to Intel Corp.(INTC). Intel shares lost 1.4%.
After the market closes on Wednesday, software giant Oracle Corp.(ORCL) will report quarterly results (http://www.marketwatch.com/story/oracle-earnings-time-for-results-to-match-the-bluster-2017-06-20).
Economic news: Sales of previously owned homes rebounded in May despite leaner supply and higher prices.
Other markets:Stocks in Asia closed mostly lower (http://www.marketwatch.com/story/global-oil-slump-weighs-on-asian-markets-2017-06-20), but with the Shanghai Composite Index bucking the negative trend and rising 0.5%. The positive close in China came after MSCI Inc. late Tuesday said it would include some Chinese stocks in its emerging-markets index (http://www.marketwatch.com/story/msci-to-add-222-china-a-shares-in-emerging-markets-index-2017-06-20).
European stocks were mired in negative territory (http://www.marketwatch.com/story/european-stocks-pushed-down-led-by-french-shares-oil-prices-2017-06-21) as energy stocks were hurt by oil's slide and as France's CAC index fell 0.8%. The pound dropped to a two-month low in early trade (http://www.marketwatch.com/story/pound-hits-2-month-low-as-doubts-over-support-for-uk-government-weigh-2017-06-21), but jumped to $1.2683 after a Bank of England policy maker talked about withdrawal monetary stimulus.
Gold was up 0.2% at $1,245.90 an ounce, while the ICE Dollar Index was flat at 97.708.
(END) Dow Jones Newswires
June 21, 2017 13:10 ET (17:10 GMT)