Wall Street edged lower on Wednesday as investors stewed about future interest rate hikes and cheaper oil dragged down energy shares, although Apple surged to its highest level this year.
Speculation about the timing of the Federal Reserve’s next interest rate hike has shaken major stock indexes following contrasting comments from Fed officials.
The S&P 500 remains down almost 3 per cent from before a steep sell-off on Friday, even though interest rate futures indicate expectations for a rate hike at the Fed’s September 20-21 meeting are still low.
“What you’re seeing is a little preview for what will happen when the Fed does raise rates,” said Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners. “People are starting to make changes to their portfolios.”
Apple jumped 3.6 per cent and briefly touched a 2016 high, with its market capitalisation topping $600 billion for the first time since April, as Wall Street bet the technology company's newest iPhone would help shore up falling sales.
Its rally helped push the S&P 500 technology index up 0.58 per cent, making it the session’s strongest sector.
Oil prices dropped 2 per cent following data that showed large weekly builds in US petroleum products, sending the S&P energy index down 1.15 per cent.
Exxon Mobil declined 0.72 per cent, the heaviest drag on the S&P 500.
After spending much of the day with gains, the Dow Jones industrial average ended down 0.18 per cent at 18,034.77 points and the S&P 500 gave up 0.06 per cent to 2,125.77.
The Nasdaq Composite added 0.36 per cent to 5,173.77.
Monsanto agreed to be bought by Bayer , but its stock rose just 0.62 per cent to $106.76, well below the offer of $128 per share, due to concerns about regulatory approvals.
Vitae Pharmaceuticals shares more than doubled to $20.85 after Allergan said it would buy the company for $639 million. Allergan rose 1.78 per cent.
Ford fell 1.94 percent after the automaker said 2017 financial performance would decline from this year’s levels.
Declining issues outnumbered advancing ones on the NYSE by a 1.11-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favoured decliners.
The S&P 500 posted 1 new 52-week high and 3 new lows; the Nasdaq Composite recorded 45 new highs and 41 new lows.
About 7.0 billion shares changed hands on US exchanges, above the 6.5 billion daily average for the past 20 trading days, according to Thomson Reuters data.