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U.S. stocks are lower to start the week as oil prices surge

Published Sep 04, 2023 06:54PM ET Updated Sep 05, 2023 12:21PM ET
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Investing.com -- U.S. stocks were mixed to start the holiday-shortened week as investors look to the Federal Reserve's policy meeting at the end of September and oil prices surged.

At 12:19 ET (16:13 GMT), the Dow Jones Industrial Average was down 59 points or 0.2%, while the S&P 500 was down 0.2% and the NASDAQ Composite was down less than 0.1%.

Wall Street’s main equity indices recorded healthy gains last week, with the blue-chip Dow Jones Industrial Average adding 1.4% and the tech-heavy Nasdaq Composite gaining 3.3%, their best weekly performances since July, while the broad-based S&P 500 rose 2.5%, its best week since June.

Global data points to economic weakness

However, the investor sentiment has become more fragile as U.S. investors returned from their long weekend to further evidence of a slowdown in the global economy.

Chinese services sector activity grew at a slower-than-expected pace in August, with the Caixin services purchasing managers’ index offering up its weakest showing in eight months.

The news out of Europe was similarly bleak, with data showing that the decline in eurozone business activity accelerated faster than initially thought last month as the bloc's dominant services industry fell into contraction.

HCOB's final Composite Purchasing Managers' Index, compiled by S&P Global and seen as a good barometer of overall economic health, dropped to its lowest level since November 2020.

Goldman cuts probability of U.S. recession

Factory orders for July fell 2.1%, beating expectations for a fall of 2.5% on the month, but the U.S. economy is still seen as the beacon of global hope.

Goldman Sachs has turned more confident that the U.S. economy will avoid a massive contraction in the near term, lowering earlier Tuesday the probability that the country would fall into a recession in the next 12 months to 15% from 20%, citing positive inflation data and last week's labor market report.

The investment bank highlighted Fed Chair Jerome Powell's current "careful" approach to future rate decisions, arguing it is a signal that a September hike is "off the table." 

Investors will get the chance to hear from several Fed speakers during the coming week, starting off on Wednesday with Dallas Fed President Lorie Logan.

Disney spat with Charter in spotlight 

In corporate news, the entertainment sector is likely to be in focus, after Walt Disney (NYSE:DIS) urged customers of Charter Communications (NASDAQ:CHTR)' Spectrum cable service to consider switching to a live television option from Hulu as the media companies remain at odds over a new distribution deal. Disney shares rose 0.2%.

In a blog post on Monday, Disney said it hoped it would be able to reach an agreement to restore access to ABC, ESPN and other Disney-owned channels that have been blacked out on Charter's service since Thursday.

Crude falls on weak Chinese economic data

Oil prices rose as leading OPEC+ members Saudi Arabia and Russia agree to extensions of their output cuts this week, leading to a further tightening of the market. WTI was up 2.2% to $87.40 a barrel while Brent was up 1.9% to $90.69 a barrel.

(Peter Nurse and Oliver Gray contributed to this item.)

 

U.S. stocks are lower to start the week as oil prices surge
 

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Comments (10)
Stan Smith
Stan Smith Sep 05, 2023 3:44PM ET
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Its almost 4pm...miracle turn around imminent.. Banking crisis are all baked in anyway ..lol
soho electronics
soho electronics Sep 05, 2023 2:54PM ET
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FAANG to the rescue!
Weeping Angel
Weeping Angel Sep 05, 2023 2:28PM ET
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And the DXY has just made a higher high on the weekly. But that doesn’t matter. The 500 will pump regardless because it’s nothing more than fraud.
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First Last
First Last Sep 05, 2023 2:28PM ET
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* What
Weeping Angel
Weeping Angel Sep 05, 2023 2:28PM ET
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Red by 0.02% at time of posting. And consolidating on the daily. It’s a scam bro. Better to buy other asset classes
First Last
First Last Sep 05, 2023 2:28PM ET
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Weeping Angel   More like down 0.20% at op.  What other asset classes are less scammy?
First Last
First Last Sep 05, 2023 2:28PM ET
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Closed at -0.41.  We really don't need another inaccurate bear like Mitchel P.
First Last
First Last Sep 05, 2023 2:28PM ET
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* -0.41%
Mitchel Pioneer
Mitchel Pioneer Sep 05, 2023 12:52PM ET
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10AM breaker fire and the NASDAQ magically goes green.  Criminally manipulated JOKE.
Steven ML
Steven ML Sep 05, 2023 12:49PM ET
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Everything's up 20-30-40% for no reason. Why shouldn't oil do the same?
First Last
First Last Sep 05, 2023 12:49PM ET
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Why shouldn't the stock market go up, too?
Gary Offill
Gary Offill Sep 05, 2023 12:44PM ET
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Thieving greedy oil traders are to blame for high gas, oil and food prices. They serve no purpose but to serve themselves.
First Last
First Last Sep 05, 2023 12:44PM ET
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It's the  jingoistic Russians' all-out invasion of Ukraine.  They are oil traders and self-serving.
Casador Del Oso
Casador Del Oso Sep 05, 2023 12:36PM ET
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Higher oil prices equals higher inflation. Excessive fiscal spending equals even higher inflation.
Scott Meyers
Scott Meyers Sep 05, 2023 7:18AM ET
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hahahaha here's your sign to short at will
Sep 05, 2023 12:27AM ET
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Keep shorting
Michael Benson
Michael Benson Sep 04, 2023 7:16PM ET
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Blockchain technology is disrupting traditional finance.
Michael Benson
Michael Benson Sep 04, 2023 7:16PM ET
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The global economy is becoming more interconnected.
Matt Kay
Matt Kay Sep 04, 2023 7:16PM ET
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bfo, wanna buy some NFTs, bro?
 
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