You are here

US: Weakness in energy, banking shares lead stocks down

39317189 - 05_08_2016 - US STOCKS.jpg

[NEW YORK] Energy and banking shares were among the biggest losers Wednesday as US stocks retreated from record levels.

Dow members ExxonMobil and Chevron lost 1.8 per cent and 1.2 per cent respectively as oil prices fell on data showing higher US petroleum inventories.

Bank of America lost 2.5 per cent and Wells Fargo 1.5 per cent on speculation the Federal Reserve would not hike interest rates in 2016.

Analysts said the market was also hit by profit-taking after US stocks reached new records over the last three sessions.

The Dow Jones Industrial Average lost 0.2 per cent at 18,495.66.

The broad-based S&P 500 fell 0.3 per cent to 2,175.49, while the tech-rich Nasdaq Composite Index shed 0.4 per cent to 5,204.58.

Dow member Disney rose 1.2 per cent after reporting a 2.8 per cent increase in third-quarter earnings to US$2.7 billion as ticket sales for "Finding Dory" and other cinema blockbusters bolstered results.

Analysts also praised Disney's US$1 billion investment in the BAMTech video streaming service, Major League Baseball's direct-to-consumer broadcast company.

The move, along with Disney efforts to provide content directly to consumers "finally gives investors real hope that Disney can build new, incremental, revenue streams" to offset declines in conventional media revenues, said Credit Suisse.

Perrigo, which makes over-the-counter and pharmaceutical drugs, plummeted 9.6 per cent after slashing its profit forecast due to weak pricing dynamics in the pharma market.

Apparel and handbag maker Michael Kors Holdings dropped 2.8 per cent after reporting a 16.1 per cent drop in first-quarter net income to US$147.1 million.

Ralph Lauren shares jumped 8.4 per cent after reporting first-quarter earnings of US$1.06 per share, better than the 89 US cents forecast by analysts.