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US: Wall Street cedes ground as oil decline deepens

Tuesday, December 29, 2015 - 06:29
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[NEW YORK] Wall Street fell on Monday, hurt by a steep drop oil prices as well as a dip in Apple shares, pushing the S&P 500 back into negative territory for 2015.

The S&P 500 energy sector lost 1.79 per cent, easily the poorest performer as a 3 per cent drop in oil prices led investors to unload shares of Exxon Mobil, down 0.73 per cent, and Chevron, which fell 1.84 per cent.

US stock indexes have closely tracked crude prices in the past several weeks.

Following the US Federal Reserve's first rate hike in almost a decade this month, the S&P 500 is marginally lower for the year and the Dow Jones industrial average is almost 2 per cent weaker, disappointing investors hoping for a last-minute rally. "The interest rate issue has been settled and markets have incorporated Fed action. But you have energy and tax loss harvesting moving markets back and forth in these last few weeks," said Tim Courtney, chief investment officer at Exencial Wealth Advisors, which oversees US$1.4 billion in assets.

The Dow Jones industrial average ended down 0.14 per cent at 17,528.47 and the S&P 500 lost 0.22 per cent to 2,056.51. The Nasdaq Composite fell 0.15 per cent to 5,040.99.

Apple lost 1.12 per cent and was the biggest drag on the S&P and Nasdaq. The company's stock has lost 9 per cent in the past month with investors worried that annual iPhone sales could decline for the first time in 2016.

Six out of 10 S&P sectors were lower, with consumer discretionary up 0.26 per cent and leading gainers thanks to a 1.87 per cent rise in Amazon.com.

Trading volumes are expected be subdued through the week, which is likely to exacerbate volatility.

Valeant fell 10.48 per cent after the Canadian drugmaker said Chief Executive Michael Pearson was going on medical leave.

Fitbit rose 3.29 per cent after reports that the wearable gadget maker's iOS app was the most downloaded after Christmas, suggesting strong holiday demand.

Dow component Walt Disney gained 1.31 per cent after the company's latest Star Wars installment topped US$1 billion in ticket sales.

Declining issues outnumbered advancing ones on the NYSE by 1,924 to 1,172. On the Nasdaq, 1,850 issues fell and 1,011 rose.

The S&P 500 index showed four new 52-week highs and no new lows, while the Nasdaq recorded 41 new highs and 44 new lows.

Volume on the US exchanges was 4.9 billion shares, compared to a 7.4 billion average over the last 20 trading days, according to Thomson Reuters data.

REUTERS