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US stocks end down, Dow misses 20,000 again

Last updated: 17:01 21 Dec 2016 EST, First published: 03:43 21 Dec 2016 EST

US stocks end down, Dow misses 20,000 again

US stocks ended lower on Wednesday as the Dow once more attempted and failed to break 20,000.

With just 1 and a half sessions to go before the holiday season (US markets close early at 1300 ET on Friday) the Dow spiked to within 14 points of hitting 20,000 at the start of the session - and then spent the rest of the day languishing in negative territory. The DJIA closed down 0.2% at 19,941.

It was no better for the market bellwether, the S&P 500. In fact, it was a whole lot worse. The ticker barely managed to spike above the previous session’s closing levels before spending the rest of the day in negative territory. It closed down 0.3% at 2265.

The very same applied to the tech-heavy Nasdaq Composite. It too popped higher at the opening and then spent the rest of the day gyrating in negative territory. It closed down 0.2% at 5471.

The “Trump rally” which saw stocks break record highs on almost a daily basis since pro-business Donald Trump surprised experts and won the Nov. 8 presidential election, appears to have petered out as the remarks from Trump’s camp have become more tame and fewer and far between in the Christmas shopping week.

But whatever the theory, markets have taken a breather, noted the relative serenity in markets – the Vix index recorded just 11 points today suggesting investors are calm about markets over the next month – and decided to book profits, sending stocks south.

The top faller on the S&P 500 was Tripadvisor Inc (NASDAQ:TRIP), a classic example of the profit-taking cycle. The stock was the top riser on Tuesday after a data share with Expedia (NASDAQ:EXPE) yet on Wednesday it was the biggest faller, of 5.1% to $46.28 – almost completely wiping out the previous day’s gains.

The S&P Midcap 400 ended down 0.4% at 1679 and led by New York Community Bancorp (NYSE:NYCB), down 4.9% to $15.93.

The S&P Smallcap 600 shed 0.7% to 848 and led by farm machinery outfit New York Community Bancorp (NYSE:NYCB) down by 10.8% to $76.01 after disappointing first quarter results.


Early trading

The Dow Jones Industrial Average amounted another assault at the 20,000 level early on Wednesday, only to be beaten back to levels beneath the Tuesday close, setting the tone for US equities this session.

The Dow was soft by 0.03% at 19,968, having earlier peaked just 14 points shy of 20,000. But if anything that came as a disappointment. The previous session it hit within 13 points of the milestone level.

The S&P 500, which had indicated opening lower, was down 0.1% at 2268.

If there was any consolation it was that stocks are now “calmer” than at any time since August 2015. The Vix index, Wall Street’s measure for expected equities market volatility, has fallen below 11 for the first time since August 2015. Measuring the S&P 500 index, the Vix was as high as 23 in the days before the US Presidential election in November.

Although the last dip to 11 came just before the Shanghai stock market went into meltdown and dragged global markets south with it, in terms of “known” developments, the index suggests that investors are overall sanguine about the looming change of guard at the White House to pro-business President-elect Donald Trump.

The S&P 500 market bellwether was led lower by accounting consultant Accenture Plc (NYSE:ACN), down 4.1% to $119.02 after the accounting firm based in Dublin, Ireland, reported a lower full-year outlook with its market-topping first quarter earnings earlier.

Meanwhile, a boost in the oil price favoured Southwestern Energy Company (NYSE:SWN) up 71% to $11.12, Chesapeake Energy Corp (NYSE:CHK) up 3.3% to $7.53 and Range Resources Corp (NYSE:RRC), up 3.3% to $34.34, topping the S&P 500 risers board.

The US oil benchmark WTI was up 0.5% at $53.56. The official US oil supply data from the EIA is due at 1530 ET (1830 GMT) and forecast to see a glut reduction of 2.51mln barrels last week.

The S&P Midcap 400 was flat at 1686 while the S&P Smallcap 600 shed 0.2% to 853 and led by Finish Line (NASDAQ:FINL), down 12.7% to $20.07 as it lowered its earnings forecast amid soft sales earlier.


Early trading

US stocks are indicated opening mixed on Wednesday but with the potential to swing towards fresh record highs for a second successive session.

The Dow Jones Industrial Average will be a point of focus after it hit a record high which came within 13 points of hitting the milestone 20,000 on Tuesday. Unlike other broad tickers the Dow is indicated opening 0.05% higher, or 10 points, but it will need a further 15 points to hit the 20,000 level.

The S&P 500 future indicates a softer opening by 0.07% while the Nasdaq Composite is seen broadly flat.

Both the Dow and Nasdaq hit record highs on Tuesday.

In company news, Coca-Cola (NYSE:KO) announced Wednesday it's paying nearly $3.2bn to Anheuser-Busch InBev (NYSE:BUD) to buy the beer giant's majority stake in Coca-Cola Beverages Africa.

The African business bottles Coca-Cola drinks that are sold in countries such as South Africa, Kenya and Uganda.

AB InBev officially took control of its rival SABMiller in October in one of the biggest takeover deals ever. To ensure the business doesn't get too big, the newly formed firm has been selling off different units over the past few months.

Coca-Cola shares were 0.2% lower at $41.58 pre-market. Anheuser shares were up 0.8% at $103.85 pre-market.

Deutsche Bank AG (NYSE:DB) shares will be in focus after reports that the German top bank may reach a deal as early as Wednesday to settle allegations by the US Department of Justice that it misled investors when selling mortgage-backed securities in 2008, Reuters reported.

The bank is set to pay less than the $14bn the US had initially asked for, after months of negotiations.

Before the bell, Deutsche’s Wall Street shares were down 1% at $18.82.

Shares in sports gear maker Nike (NYSE:NKE) edged up 1.2% to $52.43 pre-market after the company reported better-than-expected results on Tuesday evening.

But shares in courier FedEx (NYSE:FDX) were down 2.7% at $193.33 as investors reacted negatively to the company's earnings.

Accenture Plc (NYSE:ACN) shares were down 3.4% at $119.89 pre-market after the accounting firm based in Dublin, Ireland, reported a lower full-year outlook with its market-topping first quarter earnings before the bell.

Worse, Finish Line Inc (NASDAQ:FINL) might see no finish in sight as its shares plunged 14.8% to $19.61 pre-market as it lowered its earnings forecast amid soft sales.

In data, US mortgage rates advanced. A worrying and often overlooked phenomenon as it was short-dated rates that were hiked last week by the Federal Reserve by 25 basis points. The US MBA 30-year mortgage rate jumped by 13 basis points in the week to December 16, suggesting that inflationary risk is edging higher at the long end of the yield curve too – and suggesting more may need to be done with rate hike firepower than rate-dovish Fed Chair Janet Yellen supposed in her speech this week.

The US official tally of oil glut, the EIA crude oil figures, are due at 1530 ET (1830 GMT) and forecast to have fallen by 2.51mln barrels last week.

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