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Thursday, 6 July 2017

S&P, Dow flat as energy weighs; Fed minutes awaited


The S&P 500 and the Dow were little changed in choppy trading on Wednesday, with a fall in oil prices taking a toll on energy stocks, but the Nasdaq was propped up by gains in tech shares.

Crude prices fell 3 percent, ending their longest bull-run in more than five years, hurt by rising OPEC exports and a stronger dollar.

Shares of Exxon and Chevron  were down more than 1 percent, weighing the most on the S&P and the Dow.

The Federal Reserve is due to release minutes of its last meeting later in the day. Investors will look for more clues on its next rate hike and details on the central bank's plan to cut its crisis-era bond portfolio.

A recent set of tepid economic data and an inflation rate below the central bank's 2 percent target may have a bearing on the Fed's rate hike plans.

"The biggest question mark for investors today is going to be an indication as far as timing is concerned for when the Fed is going to begin their balance sheet reduction plans," said Marcelle Daher, senior managing director, asset allocation at Manulife Asset Management.

"In general they have indicated September, with the last rate hike for 2017 to fall in the December time frame, so anything that confirms or denies that assumption is going to be interesting for the market."

At 11:02 a.m. ET (1502 GMT), the Dow Jones Industrial Average .DJI was down 12.76 points, or 0.06 percent, at 21,466.51.

The Nasdaq Composite .IXIC was up 26.14 points, or 0.43 percent, at 6,136.20 and the S&P 500 .SPX was up 1.99 points, or 0.08 percent, at 2,431.

The tech sector led the S&P gainers with a 0.69 percent rise, with Apple, Microsoft  and Amazon  lifting the sector.


Tech stocks have been volatile in the past few weeks on concerns over the sector's valuation, after powering the S&P's record run this year.

"In a world of muted growth, tech stocks can still be attractive for delivering attractive rates of earnings growth ... However, because of the positioning around tech, there is to be expected a period of consolidation," Daher said.

O'Reilly Automotive slumped as much as 19.9 percent to a near three-year low after its second-quarter same-store sales widely missed its own estimates. The stock dragged down other auto-parts retailers with Autozone  and Advance Auto Parts falling 9.4 percent and 14 percent.

Declining issues outnumbered advancers on the NYSE by 1,953 to 830. On the Nasdaq, 1,637 issues fell and 1,066 advanced.

Reference: Tanya Agrawal

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