By Amy Caren Daniel
Sept 25 – The three main U.S. stock indexes were little changed on Tuesday, as energy stocks gained with oil prices hitting a four-year high, offsetting losses in Facebook and chipmakers.
Facebook fell 0.9 percent and was the biggest drag on the Nasdaq and the S&P 500, after co-founders of its photo-sharing app, Instagram, resigned with scant explanation.
The Philadelphia semiconductor index dropped 1.56 percent, weighing on the technology sector, after brokerages Raymond James and KeyBanc cut their rating on a number of chipmakers.
“We’ve seen stocks in the technology sector showing strong performance this year. We are seeing profit taking in that sector and a rotation into some of the sectors that have not done as well,” said Jeff Zipper, managing director at U.S. Bank Private Wealth Management in Palm Beach, Florida.
Energy stocks jumped 0.77 percent as Brent oil hit a four-year high, boosted by imminent U.S. sanctions on Iranian exports, and OPEC and Russia’s reluctance to raise output.
Energy stocks were off their session highs, leading to a slight dip in the market, after President Donald Trump again asked OPEC nations to stop raising prices in a speech at the United Nations General Assembly.
Financials, including bank stocks, gave up earlier gains to trade flat ahead of an expected interest rate hike by the Federal Reserve at the end of its two-day meeting later on Wednesday.
The Fed’s guidance on the path for future rate hikes and its comments on the impact of the escalating trade dispute between the United States and China will also help steer investments.
“Perhaps some of the rhetoric around the tariffs and the trade talk may have put some concern into the markets that the Fed might go slower and that might have kept financials back a little bit,” Zipper said.
At 11:25 a.m. EDT the Dow Jones Industrial Average was up 20.46 points, or 0.08 percent, at 26,582.51, the S&P 500 was up 0.95 points, or 0.03 percent, at 2,920.32 and the Nasdaq Composite was up 6.89 points, or 0.09 percent, at 8,000.14.
The Fed’s third hike this year would make cash the most attractive it has been in about a decade, lowering the appeal of stocks, especially those of dividend-paying companies such as utilities.
The utilities sector slid 1.06 percent, the most among the 11 major S&P sectors. Five sectors were posting gains.
Intel fell 1.8 percent after Raymond James downgraded the stock.
Nike was off 0.4 percent ahead of its quarterly results, expected after the bell.
CenturyLink tumbled 8.1 percent after Chief Financial Officer Sunit Patel left the company in a surprise move to join T-Mobile to oversee its integration with Sprint, both of which were little changed on the day.
Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the NYSE and a 1.25-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and seven new lows, while the Nasdaq recorded 47 new highs and 30 new lows. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva)