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US: Wall St slightly higher on healthcare; oil steadies
[BENGALURU] US stocks opened higher on Wednesday as healthcare stocks rose and oil prices steadied but gains were limited as the commodity continued to hover near seven-month lows.
Oil has lost 20 per cent in value this year as a global oversupply continues to weigh on prices despite efforts by major producers to reduce output. Oil prices are on track for their biggest slide in the first half of any year since 1997.
Brent crude pared early losses to trade slightly lower at US$45.90, while US crude was marginally up at US$43.53 after Iran's oil minister said OPEC members were considering further output cuts.
The downturn has hemorrhaged the S&P energy index, making it the worst performing sector among the 11 major indexes this year. The index fell more than 13 per cent during the period, while the S&P 500 rallied 8.85 per cent. "With oil entering the so-called bearish territory, the market is looking at the negatives of lower oil prices and not necessarily the benefits of lower oil prices," said Peter Cardillo, chief market economist at First Standard Financial. "If oil prices continue to move lower, obviously that would be bad for inflation or even result in disinflation." Investors are also mindful of the impact of inflation on the pace of future interest rate hikes, with a tug-of-war between inflation and the future of financial stability playing out among the Federal Reserve's policymakers.
Dallas and Chicago Fed chiefs Robert Kaplan and Charles Evans expressed concerns regarding weak inflation, which remains stubbornly below the central bank's 2 per cent target. Both Kaplan and Evans are voting members on the Fed's rate-setting committee.
However, Boston Fed head Eric Rosengren said that the era of low interest rates in the United States and elsewhere poses financial stability risks and that central bankers must factor such concerns into their decision-making.
At 9:41am ET (1341 GMT), the Dow Jones Industrial Average was down 3.93 points, or 0.02 per cent, at 21,463.21, the S&P 500 was up 1.36 points, or 0.06 per cent, at 2,438.39 and the Nasdaq Composite index was up 19.07 points, or 0.31 per cent, at 6,207.10.
Eight of the 11 major S&P sectors were lower, with the financial index's 0.36 per cent fall leading the decliners.
Healthcare led the three gainers, with a rise of 0.65 per cent. UnitedHealth and Johnson and Johnson rose about 0.5 per cent and were among the biggest boosts on the Dow.
Adobe Systems was up 3.4 per cent at US$145.71 after the software forecast current-quarter above analysts' estimates.
Declining issues outnumbered advancers on the NYSE by 1,250 to 1,231. On the Nasdaq, 1,310 issues rose and 886 fell.