Wall Street falls, weighed by transport stocks
Wall Street stocks fell on Friday as a spike in oil prices hit shares of airlines and other transportation companies and investors took a cautious stance before the weekend.
Low trading volume also suggested investors were holding off major new bets until they see early quarterly earnings beginning next week.
The S&P 500 was on track to end a quiet week slightly lower. Volume was similar to last week's, which was the lightest of the year as investors weighed the impact of overseas headwinds and signs of U.S. economic recovery.
U.S. crude oil futures settled at $112.79 a barrel, up 2.3 percent and the highest since September 2008.
The Arca airline index <.XAL> shed 3 percent and the Dow Jones Transportation Average <.DJT> fell 1.9 percent.
The S&P faces resistance around 1,345, near its 2011 high. Many analysts believe earnings could be the catalyst that pushes the benchmark index through that resistance.
If the earnings next week are robust enough, we might go above 1,350, which is the top of the trading range. But since the market is very complacent, we might easily turn the other way if we see a negative outlook, said James Meyer, chief investment officer at Tower Bridge Advisors in West Conshohocken, Pennsylvania.
The Dow Jones industrial average <.DJI> was down 71.25 points, or 0.57 percent, at 12,338.24. The Standard & Poor's 500 Index <.SPX> was down 8.31 points, or 0.62 percent, at 1,325.20. The Nasdaq Composite Index <.IXIC> was down 20.20 points, or 0.72 percent, at 2,775.94.
The earnings season will begin unofficially with Alcoa Inc
Bullishness has risen to levels not seen since last December before earnings, according to a survey by Investors Intelligence.
Quincy Krosby, market strategist at Prudential Financial
in Newark, New Jersey, said corporate outlooks will be key, given the rising cost of raw materials.
There is a gnawing sense that perhaps the U.S. economy may be losing some of the momentum that we saw in the first quarter, she said. What you want to hear is whether or not these companies can pass along these costs.
Occidental Petroleum Corp
Copper rose 2.1 percent while gold hit record highs on Friday and silver reached its strongest level since early 1980. U.S.-listed shares of miner Rio Tinto Plc
The White House and Congress faced a midnight deadline to break a budget deadlock. Democratic and Republican leaders said there was still no overall deal on government funding for the rest of the fiscal year.
(Reporting by Angela Moon, Editing by Kenneth Barry)
© Copyright Thomson Reuters 2024. All rights reserved.