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Stocks flat, U.S. oil falls as Isaac damage limited
NEW YORK |
NEW YORK (Reuters) - U.S. crude oil prices fell on Wednesday as Gulf Coast refineries and platforms seemed to have escaped damage from Hurricane Isaac, while global stocks were little changed as traders looked ahead to a speech by Federal Reserve Chairman Ben Bernanke on Friday.
U.S. stocks were up slightly in the lowest volume for a full session this year before Bernanke's speech in Jackson Hole, Wyoming, which traders hope will provide clues on the likelihood of further economic stimulus.
An MSCI gauge of global shares .WORLD ticked 0.07 percent lower and a European benchmark .FTEU3 closed down 0.22 percent. U.S. dollar-denominated Nikkei futures rose 0.17 percent.
"Investors are sitting on the sidelines and we've seen a flat market most of the week," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
"The bets are all squared off and it's in a wait-and-see mode."
U.S. gross domestic product data showed the world's biggest economy grew at a 1.7 percent annual pace in the second quarter, a slightly faster rate than the 1.5 percent the government initially reported. However, the pace still was seen as too slow to rule out further easing by the Fed.
While the economy grew gradually in July and early August, manufacturing was softening in many areas, Fed data showed.
U.S. stocks have been supported by expectations the Fed will pump more cash into an economy whose recovery has stalled. But a pick-up in job growth and rebound in retail sales in July have damped speculation on further easing. Other data on business spending and inflation lent support to more Fed action.
At the closing bell in New York, the Dow Jones industrial average .DJI had edged up 4.49 points, or 0.03 percent, to 13,107.48. The S&P 500 Index .SPX gained 1.19 points, or 0.08 percent, to 1,410.49. The Nasdaq Composite .IXIC added 4.04 points, or 0.13 percent, to 3,081.19.
U.S. oil futures fell 1.4 percent to $95.01 a barrel on expectations that damage from Hurricane Isaac to oil production in the U.S. Gulf Coast will be limited and in reaction to data showing crude oil stocks rose sharply last week in the United States. <O/R>
Oil had risen on Tuesday as production dropped by more than 90 percent after coastal refineries shut down in a precautionary move ahead of the approaching hurricane.
Brent crude futures were off 2 cents at $112.56.
The euro declined against the U.S. dollar, reversing some of the previous session's gains, though losses were limited by optimism the ECB will act to tackle the debt crisis.
The ECB will meet on September 6 and is seen close to producing a bond-buying plan to curb high borrowing costs for Spanish and Italian sovereign debt and ease Europe's three-year-old debt crisis.
ECB chief Mario Draghi said in a newspaper opinion piece on Wednesday the bank needed to employ "exceptional measures," bolstering speculation of imminent action.
With the risk of disappointment from the Fed and ECB high, investors were however adopting a cautious approach.
"Markets are quiet with a slight bias to shed risk," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "Paralysis ahead of Jackson Hole and extreme event risk in early September are the key themes."
The euro was down 0.28 percent at $1.2529, near last week's high of $1.2589, the highest since early July.
Prices on medium- and long-dated U.S. Treasuries slipped earlier in the session after data showed pending U.S. home sales rose to their highest in more than two years, reinforcing the view the housing recovery is gaining traction.
This week's $99 billion of U.S. government debt supply also weighed on prices.
The U.S. benchmark 10-year Treasury note was down 6/32 in price, with the yield at 1.6557 percent.
(Additional reporting by Chuck Mikolajczak, Richard Leong and Wanfeng Zhou; Editing by James Dalgleish)
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