Wall Street slides on fall in health care and energy stocks
US stocks indexes slipped on Wednesday on a tumble in health care and energy stocks, while oil prices slumped after US government data showed a rise in crude inventories, adding to worries about oversupply.
Gloomy quarterly earnings reports dragged on European shares, but were offset by hopes for ongoing central bank support for the economy ahead of a European Central Bank meeting on Thursday.
MSCI’s all-country world equity index was last down 0.31 per cent.
US health insurers’s shares fell after Democratic presidential candidate Hillary Clinton said she has “serious concerns” about the plan by health insurer Aetna Inc’s plan to acquire Humana, and Anthem’s proposal to buy Cigna. The S&P healthcare index ended 0.86 per cent lower.
Valeant Pharmaceutical’s US-listed shares were down 40 per cent intraday, hitting a low of US$88.50 before regaining ground to close at $118.61, after short-seller Citron Research released a critical report about the company. Energy shares also fell with oil prices.
The Dow Jones industrial average closed down 0.28 per cent at 17,168.61. The S&P 500 finished lower by 0.58 per cent at 2,018.94. The Nasdaq Composite ended off 0.84 per cent at 4,840.12.
Europe’s broad FTSEurofirst 300 index ended 0.02 per cent lower at 1,431.61.
Brent crude oil prices fell to $47.50 a barrel, before closing at $47.85, while US crude prices hit $44.86, their lowest levels since October 2, before settling at $45.20.
US crude oil inventories rose 8 million barrels last week, the government’s Energy Information Administration (EIA) said.
US crude oil inventories are at the highest for this time of year since records began.
“If the inventory buildup this fall, winter, and spring continues in this manner from today’s much higher starting point, we can look forward to a fiasco on the storage front - and on the pricing front,” said Wolf Richter of Wolf Street Corp in San Francisco.
US Treasury yields slumped after disappointing Japanese exports revived worries about sputtering world growth and dimmed prospects for a quick hike in US interest rates. US 30-year Treasury bonds were last up 1-5/32 in price to yield 2.87 per cent, from a yield of 2.92 per cent late Tuesday.
The US dollar rose against emerging-market and commodity-linked currencies as Chinese stocks slid, while inching higher against the euro ahead of the ECB meeting.
“Expectations are for no change in the ECB’s current QE programme - launched in March and currently scheduled to go through September 2016,” CRT Capital analysts David Ader and Ian Lyngen wrote. “That said, sentiment has shifted in favour of an expansion of the programme sometime within the next several months.”
The US dollar was last 0.48 per cent higher against the Mexican peso at 16.63 pesos and was 0.86 per cent higher against the Brazilian real at 3.94 reals. The euro was last down 0.05 per cent against the greenback at $1.13395 .
The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.14 per cent at 95.043.
Gold fell almost 1.0 per cent for its biggest one-day loss in three weeks on technical selling and long liquidation. US gold futures for December delivery settled down $10.0 an ounce, or 0.9 per cent, at $1,167.1.