US stock indexes hold steady as oil's dismal week eases

Xavier Trudeau
Juin 22, 2017

Technology companies are expected to report some of the strongest earnings growth for the April-through-June quarter, one of the reasons their stocks have been helping to lead the market this year. Markets elsewhere around the world were mixed, while stocks in mainland China got a small boost after they got the OK to join a widely followed index of emerging-market stocks.

TAKING OFF: American Airlines Group rose $1.28, or 2.6 percent, to $49.71 after saying that Qatar Airways told its US rival it's looking to buy a 10 percent stake in it.

WHEN NO CHANGE IS A GOOD CHANGE: Energy stocks in the S&P 500 rose 0.7 percent, which could be considered a victory given the group has already lost almost 15 percent this year. They are down almost 15 percent for the year, when the overall S&P 500 is up 8.8 percent.

Oil on Wednesday touched its lowest price since August, as expectations continue that supplies of crude will exceed demand.

This week has been dominated by oil's tumbling price, which dropped on Wednesday to its lowest level since last summer, and how much it will affect the broader market. Brent crude, used to price worldwide oils, shed 2 cents to $44.80 in London.

"The story truly is energy right now", said JJ Kinahan, chief market strategist at TD Ameritrade. "If we get below $40, I think you'll get people adjusting their expectations".

Both main contracts dived more than two percent Wednesday despite a bigger-than-forecast drop in U.S. inventories, with analysts suggesting OPEC and Russian Federation should announce further output cuts. Its stock rose $7.59, or 8.4 percent, to $97.55.

FLASHING HIGHER: Adobe Systems jumped $3.68, or 2.6 percent, to $144.59 after reporting stronger revenue and earnings for its latest quarter than analysts expected. Its customers have been shifting toward higher-priced and more profitable products, such as leather.

ASIA'S DAY: The Shanghai Composite Index declined 0.3 percent to 3,147.45 and Tokyo's Nikkei 225 lost 0.1 percent to 20,110.51.

MSCI has been considering including these A-shares in its index for years but had demurred until now due to a range of concerns, including their inaccessibility for global investors. China has since started a "Stock Connect" program that links mainland Chinese stocks with the Hong Kong market to make them more accessible, among other changes. The 10-year Treasury yield ticked up to 2.17 percent from 2.16 percent late Tuesday. The two-year fell to 1.34 percent from 1.35 percent, and the 30-year yield slipped to 2.72 percent from 2.73 percent.

MARKETS ABROAD: In Europe, the French CAC 40 fell 0.1 percent, the German DAX was flat and the FTSE 100 in London lost 0.1 percent. The euro rose to $1.1164 from $1.1128, and the dollar dipped to 111.32 Japanese yen from 111.41 yen.

COMMODITIES: Gold was unchanged at $1,243.50, silver slipped 6 cents to $16.36 per ounce and copper added 4 cents to $2.60 per pound.

Natural gas edged up a penny to $2.90 per 1,000 cubic feet, heating oil rose a penny to $1.38 per gallon and wholesale gasoline added 2 cents to $1.43 per gallon.

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