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VOL. 40 | NO. 35 | Friday, August 26, 2016

Energy companies pull US stocks lower as oil prices fall

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NEW YORK (AP) — 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 very small, though, as this proved to be one of the quietest months in recent history for stocks.

Stocks traded lower all day and fell for the fifth time in the last six days. 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 next 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 Chair )Janet Yellen put the market on notice that she sees a rate hike in the coming months."

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.

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 helped send oil and gas companies lower. Chevron gave up $1.12, or 1.1 percent, to $100.58 and Exxon Mobil skidded 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 prep 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.

Brown-Forman, the maker of liquors including Jack Daniel's whiskey and Finlandia vodka, slumped after its sales fell short of estimates. Brown-Forman said its results were hurt by weak sales in emerging markets and the strong dollar, which makes U.S. goods more expensive overseas. The stock declined $1.78, or 3.5 percent, to $48.55.

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.

In other energy trading, wholesale gasoline fell 4 cents to $1.41 a gallon. Heating oil lost 6 cents to $1.41 a gallon. Natural gas rose 6 cents to $2.89 per 1,000 cubic feet.

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.

In Brazil the Bovespa fell 1.7 percent after the country's Senate voted to remove President Dilma Rousseff from office. The move was expected, but it was a major event in a political fight that has lasted a year and is far from over.

The DAX in Germany shed 0.6 percent and so did Britain's FTSE 100. France's CAC 40 fell 0.4 percent. Earlier, Japan's benchmark Nikkei 225 rose 1 percent as investors were cheered by a stronger dollar, which helps Japanese exporters. South Korea's Kospi lost 0.3 percent and Hong Kong's Hang Seng was down 0.2 percent.

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