NEW YORK, Sept 13 — Wall Street stocks ended lower yesterday as Oracle shares tumbled more than 13 per cent after a weak forecast and surging oil prices deepened worries about persistent price pressures ahead of crucial inflation readings this week.
Oracle shares dived to their lowest since June after the cloud-services provider forecast current-quarter revenue below targets and narrowly missed first-quarter expectations.
Cloud-computing heavyweights Amazon.com and Microsoft each fell more than 1 per cent, pressured by Oracle’s weak forecast and by a rise in US Treasury yields.
Oil prices jumped more than 1 per cent, building on a recent rally and stoking worries that sticky inflation could mean US interest rates stay higher longer in the aftermath of strong economic data.
“People are a little bit worried about energy prices picking up pretty aggressively in recent weeks and that creates some concerns as we look forward to November” when some investors worry Federal Reserve policy makers may raise rates again, said Thomas Hayes, chairman at Great Hill Capital LLC.
Investors are awaiting August consumer price index data due today and producer prices reading scheduled for tomorrow to gauge the outlook for US interest rates ahead of the Fed’s meeting on September 20.
Interest rate traders see a 93 per cent chance of rates remaining at the current levels in September but just a 56 per cent likelihood of a pause at the November meeting, according to the CME FedWatch Tool.
“All the all the inputs that we get between now and the November meeting will be important, especially those related to inflation. So that thrusts a lot of importance on tomorrow’s CPI report,” said Art Hogan, chief market strategist at B Riley Wealth.
Investors will also monitor the European Central Bank’s policy decision tomorrow, when it is seen holding rates after nine consecutive hikes.
Apple dropped 1.8 per cent after unveiling new iPhones, while not increasing prices as it faces a global smartphone slump. The stock was also hurt by a report that China’s Huawei Technologies has raised the second-half shipment target for its Mate 60 series smartphone by 20 per cent.
The S&P 500 declined 0.57 per cent to end the session at 4,461.91 points.
The Nasdaq declined 1.04 per cent to 13,773.62 points, while Dow Jones Industrial Average declined 0.05 per cent to 34,645.99 points.
Of the 11 S&P 500 sector indexes, eight declined, led lower by information technology, down 1.75 per cent, followed by a 1.06 per cent loss in communication services. The energy index added 2.31 per cent.
Volume on US exchanges was relatively light, with 9.4 billion shares traded, compared to an average of 9.9 billion shares over the previous 20 sessions.
The most traded stock in the S&P 500 was Tesla, with US$36.7 billion (RM171.5 billion) worth of shares exchanged during the session. The electric car maker declined 2.23 per cent.
WestRock jumped 2.8 per cent after agreeing to merge with Europe’s Smurfit Kappa to create the world’s largest listed paper and packaging company, worth nearly US$20 billion.
Advance Auto Parts AAP.N dropped about 8 per cent after S&P Global downgraded the auto parts retailer’s credit and debt ratings from investment grade (BBB-) to junk (BB+).
Zions Bancorp jumped 6.8 per cent after the US regional lender posted a slight increase in its monthly net interest income growth.
Declining stocks outnumbered rising ones within the S&P 500 by a 1.4-to-one ratio.
The S&P 500 posted 12 new highs and 14 new lows; the Nasdaq recorded 48 new highs and 184 new lows. — Reuters
