Market Snapshot: U.S. stocks under pressure as oil relinquishes gains
NEW YORK (MarketWatch) — The U.S. stocks were under pressure on Wednesday as crude-oil prices gave up part of the gains racked up over a four-day trading span, while a report on private-sector hiring disappointed.
Private employers added 213,000 jobs in January, according Automatic Data Processing Inc. Economists use the number to get a feel for the official jobs report due on Friday, though some analysts caution that the ADP’s predictive value of official jobs number isn’t stellar.
A sizable drop in oil prices sent energy stocks sharply lower, while investors grappled with a slew of mixed earnings, from companies such as General Motors, Walt Disney and Merck & Co.
The S&P 500 SPX, -0.21% was slightly lower with energy and health care sector stocks leading the losses. Five of 10 main sectors were trading lower.
The Dow Jones Industrial Average DJIA, +0.20% hovered near its Tuesday’s closing level, with half of its 30 member trading in negative territory.
The Nasdaq Composite COMP, -0.38% slumped, with biotech stocks leading the losses. Gilead Sciences dropped nearly 10% after disappointing earnings. The iShares Nasdaq Biotechnology ETF was down more than 3%.
Oil prices fell sharply Wednesday, with March WTI crude CLH5, -5.56% dropping more than 4% and Brent crude LCOH5, -3.90% down nearly 3%. Losses came after data released late Tuesday showed a big inventory build.
Need to Know: Careful what you wish for: Oil-price recovery may well sting
A market battleground: Expect a “battle of the bulls and bears” for Wednesday, said Michael O’Rourke, chief market strategist with JonesTrading. He notes that so far in 2015, the S&P 500 has been range-bound, with a range of 1,980 to 1,990 as support and 2,050 to 2,060 serving as resistance points.
“With the growing list of negatives, we are continually amazed at how many opportunities this market is giving investors to de-risk within 2% of the all-time high,” O’Rourke said in a note.
Stocks in the spotlight: J.M. Smucker Company SJM, +6.71% shares jumped after the company late Tuesday announced it plans to buy Big Heart Pet Brands for $3.2 billion excluding debt.
General Motors GM, +3.30% shares rose 4% after it posted results and said it would boost its dividend 20% to 36 cents a share. Clorox Co. CLX, +3.89% shares jumped after the company beat earnings estimates and lifted outlook.
Merck MRK, -4.19% was down 2% after it released results.
Finally getting the deal done: Staples Inc. SPLS, -9.68% said it will buy Office Depot Inc. ODP, +1.82% in an acquisition valued at $6.3 billion. Office Depot rose 2.6% and Staples was down 5% on that news.
Walt Disney Co. DIS, +7.42% is up 4% after earnings beat forecasts. On the losing side, Chipotle Mexican Grill Inc. CMG, -7.49% is down over 6% after profit jumped but sales fell short of expectations late Tuesday. Gilead Sciences Inc. GILD, -9.44% is down 9% after it reported earnings that beat forecasts, but said it expects price discounts for its hepatitis C drugs to double in 2015.
See more after-hours action in Movers & Shakers
China cuts reserve requirement for banks: The Nikkei 225 index NIK, +1.98% saw its biggest gain in two weeks on upbeat earnings. Well after the close for Chinese stocks, which ended the day lower, the People’s Bank of China cut its reserve ratio for banks by 0.5%. Among the reactions, gold GCH5, +0.04% and copper HGH5, +0.06% prices moved higher.
The Stoxx Europe 600 index SXXP, +0.03% was largely flat after sizable gains on Tuesday, led by a 11% surge for Greek stocks. The Athens Composite Index GD, +0.89% was down 1.6% as Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis sought a debt deal with greater leniency on repayments.
Read: European stocks mixed as Greece continues debt push
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Market Snapshot: U.S. stocks under pressure as oil relinquishes gains
