Market report

Energy slump weighs on stocks

Graphs showing the August market wrap.
Graphs showing the August market wrap.

NEW YORK -- U.S. stocks took small losses Wednesday as energy companies fell with the price of oil and chemical and materials companies traded lower.

That pulled the market lower for August, ending a five-month winning streak for stocks. The losses were small, though, as August proved to be one of the quietest months in recent history for stocks.

The Dow Jones industrial average fell 53.42 points, or 0.3 percent, to 18,400.88. The Standard & Poor's 500 index gave up 5.17 points, or 0.2 percent, to 2,170.95. The Nasdaq composite dipped 9.77 points, or 0.2 percent, to 5,213.22.

Stocks traded lower all day and fell for the fifth time in the past six trading sessions. The price of oil dropped more than 3 percent after the U.S. government said crude oil stockpiles grew more than expected last week, while gasoline stockpiles didn't shrink as much as investors hoped.

The dollar gained some strength, which sent commodity prices lower, as expectations grew that the Federal Reserve could raise interest rates from their ultra-low levels as early as this month.

"The more the market believes a Fed rate hike is coming based on better economic data, the more the dollar rises," said Quincy Krosby, market strategist at Prudential Financial. "Last Friday, [Fed Chairman] Janet Yellen put the market on notice that she sees a rate hike in the coming months."

Energy prices slumped after the U.S. government said crude oil stockpiles increased by 2.3 million barrels last week, a bigger gain than analysts expected. Gasoline stockpiles shrank, but not as much as investors had hoped.

U.S. crude fell $1.65, or 3.6 percent, to $44.70 a barrel in New York. Brent crude, the benchmark for international oil prices, lost $1.33, or 2.7 percent, to $47.04.

That pushed oil and gas company share prices lower. Chevron gave up $1.12, or 1.1 percent, to $100.58, and Exxon Mobil dropped by 38 cents to $87.14. Schlumberger declined $1.64, or 2 percent, to $79.

Tax preparer H&R Block posted a bigger first-quarter loss and less revenue than analysts expected. The company, which reported weak results from tax season this spring, said it is facing more competition in the tax preparation industry as well as a growing number of independent tax preparers. H&R Block dropped $2.54, or 10.5 percent, to $21.66. The stock is down 35 percent this year.

Materials companies took some of the biggest losses. Chemicals-maker DuPont lost 64 cents to $69.60. Agribusiness giant Monsanto fell 94 cents to $106.50, and building materials company Martin Marietta Materials lost $5.80, or 3.1 percent, to $183.03.

The S&P 500 set records in August but ended the month down 0.1 percent. The index also traded in one of the narrowest ranges of any month in its history as investors tried to get a feel for the Federal Reserve's plans. The biggest losses went to phone and utility companies, while concerns over drug pricing hurt health care stocks. Banks rose the most as investors gradually became more optimistic that interest rates will increase.

Bond prices slipped, sending yields slightly higher. The yield on the 10-year Treasury note dipped to 1.58 percent from 1.57 percent. The dollar rose to 103.44 yen from 102.97 yen. The euro rose to $1.1162 from $1.1139.

Gold fell $5.10 to $1,311.40 an ounce. Silver rose 3 cents to $18.71 an ounce. Copper remained at $2.08 a pound.

Business on 09/01/2016

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