Weekend Economists Celebrate Harry Potter's 35th Birthday July 31st, 2015

[Demeter]

24. Wall Street ends lower as weak oil weighs

http://www.reuters.com/article/2015/07/31/us-markets-stocks-idUSKCN0Q51CT20150731?feedType=RSS&feedName=businessNews

Wall Street ended on a sour note on Friday as a drop in energy stocks eclipsed wage data that supported expectations that the U.S. Federal Reserve might hold off on an interest rate.

Exxon Mobil (XOM.N) shares dropped 4.58 percent while Chevron (CVX.N) lost 4.89 percent after reporting poor quarterly earnings due to weak oil prices. The drop in those stocks, as well as additional declines in crude prices amid oversupply concerns, contributed to a 2.6 percent decline in the energy index .SPNY, its deepest one-day drop since January.

"It’s all about rotation (between sectors). That's what this market has been about since we've been in such a tight trading range this year," said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading LLC in Las Vegas.

Initially helping share prices, U.S. labor costs in the second quarter recorded their smallest increase in 33 years, with the Employment Cost Index edging up a less-than-expected 0.2 percent.

"The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September hike. This definitely puts a lower probability on that," said Stanley Sun, interest rate strategist at Nomura Securities International in New York.

Earlier in the week, many investors considered positive comments by the Fed about the economy as a signal that a rate rise could come as early as September.

The Dow Jones industrial average .DJI ended down 0.31 percent at 17,690.46. The S&P 500 .SPX finished 0.22 percent lower at 2,103.92 after opening with a gain. The Nasdaq Composite .IXIC edged down 0.01 percent to 5,128.28.

More stocks rose than fell in the S&P and Nasdaq.

For the week, the Dow rose 0.7 percent, the S&P added 1.2 percent and the Nasdaq increased 0.8 percent. For July, gains for the Dow, S&P and Nasdaq were 0.4 percent, 2 percent and 2.8 percent, respectively.

Despite the S&P's negative close on Friday, half of the 10 major S&P 500 sectors were higher, with the utilities index's .SPLRCU 0.98 percent rise leading the advancers...With more than half of the S&P 500 companies having reported their second-quarter results, analysts expect overall earnings to edge up 0.9 percent and revenue to decline 3.3 percent, according to Thomson Reuters data.

...Some 6.8 billion shares changed hands on U.S. exchanges, just above the daily average of 6.7 billion this month, according to BATS Global Markets.