While You Were Sleeping: Wall St pares gains as White House press room evacuated; oil climbs

Wednesday 10th June 2015

US shares fell, with key benchmarks reversing earlier gains after Secret Service officials evacuated the White House briefing room because of a security issue.

The officials gave no further explanation although video footage shows a dog and its handler checking the room, which was emptied during a briefing. President Barack Obama was reportedly in the White House at the time. A floor of the Dirksen Senate Office building had earlier been evacuated during a Transportation Security Administration hearing because of a bomb threat.

Crude oil prices jumped on speculation American stockpiles fell for a sixth straight week while the Energy Information Administration raised its estimate for demand this year.

Brent crude futures rose 3.4 percent to US$64.80 a barrel and prices of gasoline and diesel also rose.

Analysts expect US crude oil inventories fell by 1.7 million barrels last week, according to a Reuters survey. The American Petroleum Institute releases its estimate on Tuesday ahead of the official EIA numbers on Wednesday. A separate EIA report showed the agency raised its forecast for oil demand this year to 380,000 barrels a day from 340,000 barrels.

The Dow Jones industrial average fell 0.01 percent to 17,764.04 and the Standard & Poor’s 500 Index rose 0.4 percent to 2,080.15. The Nasdaq Composite slipped 0.09 percent to 4,427.61. The Dow and the S&P 500 are at their lowest levels in about two months.

Energy related stocks including Freeport-McMoRan, Murphy Oil and Noble Energy were among gainers on the S&P 500.

Investors are awaiting reports on US consumer sentiment and retail sales this week, which are expected to add to signs of a strengthening American economy, following stronger-than-expected payrolls data last week. The jobs figures have stoked expectations the Federal Reserve will start raising interest rates in September.

Data today on US job openings, small business confidence and wholesale inventories added to positive sentiment about the economy.

Job openings, a measure of labour demand, rose 5.2 percent to a seasonally adjusted 5.4 million in April, a record high, according to the Labor Department’s Job Openings and Labor Turnover Survey.

"This is more confirmation that the economy is indeed emerging from that soft patch in the first quarter and can still pick up even faster in the next few months," Chris Rupkey, chief financial economist at MUFG Union Bank in New York, told Reuters.

Meanwhile, confidence among small businesses rose to a five-month high in May, according to the National Federation of Independent Business.

The share of businesses saying they could not fill open positions also increased to 29 percent last month, matching February's reading, which was the highest since April 2006.

European stocks fell, joining a selloff that had started on Wall Street and continued into Asia yesterday.

The FTSEurofirst 300 index fell for the sixth session in a row, down 0.7 percent as investors mulled the prospect of rate hikes in the US and amid concerns China’s pace of economic growth may be wavering.

HSBC declined 0.9 percent on expectations the bank’s intention to cut up to 50,000 jobs won’t be enough to restore earnings. Deutsche Bank dropped 2.5 percent after the German lender said its Frankfurt offices had been raided by prosecutors probing regulatory violations.

Greek officials are continuing talks with creditors at the European Union and International Monetary Fund to avoid defaulting on debt. At the same time Prime Minister Alexis Tsipras is trying to unify his Syriza party, which has baulked at creditor demands for more economic reforms, in an effort to reach compromise on the debt.

"We will do everything to keep Greece in the euro zone ... but our patience is running out," Reuters reported Finnish Finance Minister Alexander Stubb as saying.

(BusinessDesk)

BusinessDesk.co.nz

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