Wall Street dips as oil slide drags down energy shares

(Reuters) - U.S. stocks were slightly lower on Wednesday as a steep fall in crude oil prices hit energy shares, more than offseting gains in technology and bank stocks.

The S&P 500 index slipped after coming within spitting distance of a record high following a four-day rise. It is about half a percent away from the all-time high it hit on Jan. 26.

Crude oil prices tumbled more than 3.5 percent on slowing Chinese demand and trade issues, leading to a 1.29 percent drop in the energy sector, which was also the biggest drag on the S&P.

Dow components Chevron dropped 1.2 percent and Exxon 1 percent. China’s tit-for-tat response to the Trump administration’s latest round of tariffs dragged down shares of trade-sensitive stocks such as Caterpillar and Boeing. The two companies weighed the most on the Dow Jones index.

The losses, however, were limited due to gains in technology shares, led by Google-parent Alphabet, Facebook and Microsoft.

“The underlying sentiment is that the trade issue is more of a short-term event and not a long-term issue,” said Jimmy Lee, founder and CEO of Wealth Consulting Group, a Las Vegas-based wealth management firm.

“If you look at the fundamentals, earnings are really good and the economy is growing really fast and we’re finally getting growth after a long time.”

A strong earnings season has kept up the momentum in the markets and cushioned major blows from trade-related issues.

As the second-quarter earnings season winds down, the estimate for profit growth of S&P companies in the second quarter has risen to 24.1 percent, higher than 20.7 percent at the start of July, according to Thomson Reuters I/B/E/S.

At 12:28 a.m. EDT the Dow Jones Industrial Average was down 61.82 points, or 0.24 percent, at 25,567.09, the S&P 500 was down 2.30 points, or 0.08 percent, at 2,856.15 and the Nasdaq Composite was down 4.03 points, or 0.05 percent, at 7,879.64.

Five of the 11 major S&P sectors were higher, with financial stocks leading the gains.

Shares of Bank of America, JP Morgan and Wells Fargo rose between 0.6 percent and 0.9 percent, lifting the sector.

Tesla shares were down 2.4 percent, following a steep rise a day earlier on Chief Executive Officer Elon Musk’s plan to take the company private. Walt Disney fell 1.4 percent and was among the biggest decliners on the Dow after its quarterly profit missed estimates.

Mylan fell 3 percent after the drugmaker said it was evaluating a wide range of options and reported a quarterly profit that missed estimates.

Declining issues outnumbered advancers for a 1.33-to-1 ratio on the NYSE and for a 1.16-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and three new lows, while the Nasdaq recorded 63 new highs and 65 new lows.