Stocks are lower to start the week as oil prices surge

  • Stock Market News
Stocks are lower to start the week as oil prices surge
Credit: © Reuters. -- 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 (NYSE: SPGI ) 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 (NYSE: GS ) 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.)


Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or