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US stocks down as investors await jobs report

Published 30/08/2016

It was a quiet day on Wall Street as a slow summer begins to wind down (AP)
It was a quiet day on Wall Street as a slow summer begins to wind down (AP)

US stocks have fallen slightly in another quiet day on Wall Street as hesitant investors remained on the sidelines as a slow summer winds down.

Shares of the confectionery company Hershey plunged after it walked away from a merger proposal, and Apple slipped after the company was hit with a large tax bill in Europe.

Investors continue to wait to see whether the Federal Reserve will raise interest rates later this year. The next key piece of data is coming on Friday with the August jobs report.

The Dow Jones industrial average fell 48.69 points, or 0.3%, to 18,454.30. The Standard & Poor's 500 index fell 4.26 points, or 0.2%, to 2,176.12 and the Nasdaq composite fell 9.34 points, or 0.2%, to 5,222.99.

Trading was extremely light once again, with roughly 2.95 billion shares changing hands on the New York Stock Exchange, the seventh-slowest day of the year. Monday was the slowest trading day of 2016.

Bank stocks were among the few gainers as investors continued to interpret comments from Federal Reserve chair Janet Yellen and vice chair Stanley Fisher at a conference in Wyoming last week as signs the Fed is ready to raise interest rates later this year.

Ms Yellen said "the case for an increase (in interest rates) has strengthened in recent months".

Banks are a major beneficiary of rising interest rates since they can charge more for loans when interest rates rise.

Bank of America rose 35 cents, or 2%, to 16.19 dollars (£12.35), Wells Fargo rose 1.06 dollars, or 2%, to 50.62 dollars (£38) and Morgan Stanley rose 78 cents, or 2.5%, to 32.19 (£24.56).

Investors are waiting to see if the Labour Department's monthly jobs survey this week indicates whether the US economy remains on solid footing. Economists expect employers added 182,500 jobs in August and that the unemployment rate fell slightly to 4.8%.

A strong jobs report would give the Federal Reserve additional ammunition to raise interest rates either at its September meeting or later this year.

In other company news, Hershey fell 12.02 dollars (£9.17), or 11%, to 99.65 dollars (£76) after snack food company Mondelez International said it was walking away from its proposal to buy Hershey for roughly 25 billion dollars (£19).

Mondelez, which makes Oreo cookies and other snack foods, initially proposed to buy the company earlier this summer, but Hershey is a notoriously difficult company to propose mergers with since the majority of the shares are controlled by a non-profit organisation.

Apple fell 82 cents, or 0.8% , to 106 dollars (£80) after the European Union ruled that it has to pay 14.5 billion dollars (£11 billion) in back taxes. Both Apple and Ireland said they would appeal the decision, which is the EU's latest and most aggressive move in its campaign to have multinationals pay a fair tax rate.

United Continental rose 4.04 dollars (£3), or 8.6%, to 50.99 dollars (£39) after the company announced it was hiring a former American Airlines executive, Scott Kirby, to become president and take over day-to-day operations.

In energy trading, benchmark U.S. crude oil fell 63 cents to 46.35 dollars a barrel. Brent crude, used to price oil internationally, fell 89 cents to 48.37 dollars a barrel. In other energy commodities, heating oil fell 1.5 cents to 1.471 dollars a gallon, wholesale gasoline fell 1.9 cents to 1.448 dollars a gallon and natural gas fell seven cents to 2.827 dollars per thousand cubic feet.

Bond prices were mostly unchanged. The yield on the 10-year Treasury note edged up to 1.57%.


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