Drop In Oil Prices Leads To Lower Close On Wall Street - U.S. Commentary

(RTTNews) - Following the modest uptick seen in the previous session, stocks moved back to the downside during trading on Wednesday. Selling pressure was somewhat subdued, however, limiting the downside for the markets.

The major averages ended the day moderately lower. The Dow dipped 37.39 points or 0.2 percent to 18,495.66, the Nasdaq fell 20.90 points or 0.4 percent to 5,204.58 and the S&P 500 slid 6.25 points or 0.3 percent to 2,175.49.

The weakness on Wall Street came amid a steep drop by the price of crude oil, with crude for September delivery tumbling $1.06 to $41.71 a barrel.

The decrease by the price of crude oil came following the release of a report from the Energy Information Administration showing an increase in crude oil inventories in the week ended August 5th.

The EIA said crude oil inventories climbed by 1.1 million barrels and are at historically high levels for this time of year.

At the same time, the report said gasoline inventories and distillate fuel inventories fell by 2.8 million barrels and 2.0 million barrels last week, respectively.

The decrease by the price of crude oil contributed to significant weakness among oil service stocks, as reflected by the 2.4 percent drop by the Philadelphia Oil Service Index.

Electronic storage, steel, and banking stocks also showed notable moves to the downside on the day, while gold stocks moved higher along with the price of the precious metal.

Nonetheless, overall trading activity was somewhat subdued amid a lack of major U.S. economic data on the day.

Traders may have been looking ahead to the release of reports on retail sales and producer prices, which are scheduled to be posted on Friday.

The Olympic Games in Rio de Janeiro, Brazil, has also drawn attention away from the markets, leading to a lackluster performance on Wall Street.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index edged down by 0.2 percent, while Hong Kong's Hang Seng Index ticked up by 0.1 percent.

The major European also ended the day mixed. While the U.K.'s FTSE 100 Index rose by 0.2 percent, the French CAC 40 Index and the German DAX Index both fell by 0.4 percent.

In the bond market, treasuries moved to the upside on the day, extending the strong upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.6 basis points to 1.509 percent.