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US: Materials, energy shares weigh on indexes

Wednesday, March 23, 2016 - 22:07

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[NEW YORK] US stock indexes were slightly lower on Wednesday morning, dragged down by energy and materials stocks, as investors remained wary of taking on risk in a week marred by the attacks in Brussels and shortened by the Good Friday holiday.

[NEW YORK] US stock indexes were slightly lower on Wednesday morning, dragged down by energy and materials stocks, as investors remained wary of taking on risk in a week marred by the attacks in Brussels and shortened by the Good Friday holiday.

Oil prices were lower after data showing a rise in US stockpiles last week rekindled worries about a global glut. Gold and metals prices also fell as the dollar strengthened on hawkish comments from US Federal Reserve policymakers.

The Dow Jones industrial average held onto meager gains for the year after a five-week rally helped the market recover from a steep selloff at the start of the year. The S&P 500 slipped back to negative territory for 2016. "We've seen a tremendous run-up largely related to the fact that the world didn't end after all, but it is hard to see where we get the kind of improvement from here which would drive the market sustainably higher," said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.

At 9:39 a.m. ET, the Dow Jones industrial average was down 35.16 points, or 0.2 per cent, at 17,547.41, the S&P 500 was down 4.18 points, or 0.2 per cent, at 2,045.62 and the Nasdaq Composite was down 9.62 points, or 0.2 per cent, at 4,812.04.

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Nine of the 10 major S&P sectors were lower, led by the 0.85 per cent fall in the materials sector. Newmont Mining shares were down 4.7 per cent at $26.09 and weighed the most on the sector.

Energy stocks were off 0.73 per cent, with Chevron's 0.8 per cent decline exerting the biggest influence.

Investors were assessing recent comments from Fed officials, supporting more interest rate hikes this year as the economy continues to show signs of resilience.

Data on Wednesday includes single-family home sales for February, due at 10 a.m. (1400 GMT). Sales are expected to have risen 3.2 per cent, suggesting that the housing market continues to recover.

Nike shares were down 4.8 per cent at $61.80 after the world's largest footwear maker reported quarterly revenue below estimates. The stock was the biggest drag on the Dow.

Gilead Sciences was down 2 per cent at $91.87 after a federal jury upheld the validity of two Merck patents in a high-profile dispute over Gilead's blockbuster cure for hepatitis C. Merck was up half a per cent.

Valeant Pharmaceuticals was up 2.6 per cent at $32.72, set for a third-straight day of gains.

Michaels Cos was down 2.7 per cent at $26.20 after private equity sponsors cut their stakes further in the arts and crafts retailer.

Declining issues outnumbered advancing ones on the NYSE by 1,831 to 716. On the Nasdaq, 1,426 issues fell and 769 advanced.

The S&P 500 index showed three new 52-week highs and no new lows, while the Nasdaq recorded 10 new highs and seven new lows.

REUTERS

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