While you were sleeping: Home run awaited

While you were sleeping: Home run awaited

July 26 (BusinessDesk) - Wall Street slid with the price of oil, pushing down shares of Chevron and Exxon Mobil, as investors awaited a host of key events including a slew of corporate earnings and a Federal Reserve policy meeting.

In 2.59pm trading in New York, the Dow Jones Industrial Average retreated 0.6 percent, while the Nasdaq Composite Index slipped 0.2 percent. In 2.44pm trading, the Standard & Poor’s 500 Index declined 0.5 percent. The S&P 500 had ended Friday at a record high.

“Earnings are the key this week, but there’s also the Fed, the Bank of Japan and the Democratic National Convention, so you have a lot of things that go right or wrong,” John Canally, chief economic strategist at LPL Financial, told Bloomberg. “We’ve run the market up to new all-time highs at peak valuations, so we have to hit a home run on earnings to get much higher from here.”

Slides in shares of Chevron and those of Exxon Mobil, down 2.7 percent and 2.2 percent respectively, led the Dow lower.

US crude fell to the lowest level in three months amid concern about excess supply.

“We've got gasoline stocks that are through the roof ... And you have the spectre of turnaround season not too far in the horizon,” Robert Yawger, senior vice president of energy futures at Mizuho Securities USA told Reuters.

Yawger downgraded his price target on US crude to US$40 from US$45 a barrel, according to Reuters.

Even so, it wasn’t all gloomy sentiment.

Shares of Sprint Corp jumped, last up 27.3 percent, after its latest quarterly earnings underpinned confidence that the company’s turnaround is gaining traction.

"We expect that we will have adequate sources to provide all the capital necessary to fund the business and repay the debt maturities due in FY 16," Sprint Chief Financial Officer Tarek Robbiati said on a conference call with analysts, according to Reuters.

Meanwhile, Verizon Communications said it agreed to buy Yahoo for about US$4.8 billion in cash.

“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers," Lowell McAdam, Verizon Chairman and CEO, said in a statement. "The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”

Shares of Yahoo traded 2.1 percent weaker at US$38.55 as of 2.56pm in New York, while shares of Verizon traded 0.6 percent lower.

Europe’s Stoxx 600 Index finished the day with an advance of 0.2 percent from the previous close. France’s CAC 40 index also rose 0.2 percent, while Germany’s DAX index added 0.5 percent. UK’s FTSE 100 index fell 0.2 percent.

A report showed that the Ifo institute’s index of German business sentiment fell less than expected in July.

(BusinessDesk)

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