Investing.com -- U.S. stocks fell mildly on Wednesday as oil prices crashed below $40 a barrel and hawkish comments from a host of Federal Reserve policymakers on the increased possibility for multiple interest rate hikes this year halted a rally on the major indices.
In Wednesday's session, U.S. crude futures plunged more than 4%, falling under a key technical level at the close, after a massive stockpile build of nearly 9.5 million barrels last week. Following the second-largest inventory build on the calendar year, crude stockpiles rose to 532.5 million barrels, remaining at historically high levels for this time of year. Crude inventories nationwide are perilously close to reaching full storage capacity.
In spite of the sell-off, WTI crude has still surged more than 35% over the last six weeks amid heightened expectations for an OPEC-Non OPEC production freeze in the coming weeks. Concurrently, U.S. equity markets have moved in lockstep with the rebound in oil prices as a host of top energy stocks have rallied from near-yearly lows.
The Dow Jones Industrial Average fell 79.98 or 0.45% to 17,502.59, while the NASDAQ Composite index lost 52.80 or 1.10% to 4,768.86, amid sharp declines in pharmaceutical and technology stocks. The S&P 500 Composite index, meanwhile, lost 13.09 or 0.64%, as nine of 10 sectors closed in the red. Stocks in the Energy and Basic Materials industries lagged, each falling by more than 1%. Stocks in the Utilities sector led, after inching up by more than 0.6%.
The top performer on the Dow was UnitedHealth Group Incorporated (NYSE:UNH), which gained 1.76 or 1.37% to 129.78. UnitedHealth finished just above Visa Inc (NYSE:V) which added 0.99 or 1.36% to 73.95, after Starbucks Corporation (NASDAQ:SBUX) announced the expansion of its prepaid Visa rewards card program on Wednesday. The initiative, which was launched last month, has already attracted more than 500,000 customers, boosting Visa's membership base above 12 million. The worst performer was Nike Inc (NYSE:NKE), which fell 2.47 or 3.81% to 62.43, amid a spike in sell-side buying one day after the world's largest athletic apparel company reported mixed third quarter earnings for Fiscal Year 2016. During the quarter, Nike (NYSE:NKE) increased revenues by 14% on a currency neutral basis, in spite of weak sales among emerging markets.
"In the third quarter, Nike delivered robust and balanced growth across our expansive, powerful portfolio," Nike CEO Mark Parker said.
The biggest gainer on the NASDAQ was Electronic Arts Inc (NASDAQ:EA), which added 1.19 or 1.86% to 65.06, while the worst performer was Vertex Pharmaceuticals Inc (NASDAQ:VRTX), which plunged 6.46 or 7.44% to 80.32 after analysts at Goldman Sachs Group Inc (NYSE:GS) lowered their price target for the specialty drug manufacturer from $129 to $106. Shares in Vertex Pharmaceutical have fallen by more than 35% over the last year, as U.S. presidential candidates such as Democratic frontrunner Hillary Clinton have targeted the Boston-based company for price gouging.
The top performer on the S&P 500 was PEPCO Holdings Inc (NYSE:POM), which soared 5.71 or 26.88% to 26.95, after the Washington D.C. Public Service Commission approved the power company's $6.8 billion merger with Chicago-based Exelon (NYSE:EXC). After rejecting the deal on two prior occasions, regulators approved on Wednesday by a 2-1 vote due to widespread changes in the proposal which added commercial customers to a rate relief plan. The worst performer was Chesapeake Energy Corporation (NYSE:CHK), which fell 0.68 or 14.11% to 4.14. Shares in the Oklahoma City-based Oil and Gas company are still down more than 60% over the last year, even after more than doubling in value in the wake of former CEO Aubrey McClendon's death at the start of the month.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,298-788 margin.