U.S. stocks drifted lower Wednesday as cautious investors were reluctant to make big bets amid uncertainty surrounding the fate of troubled Deutsche Bank and volatile oil prices.
Investors are also watching Federal Reserve Chairwoman Janet Yellen’s testimony before the House Financial Services Committee on regulation and supervision as well as speeches from several Fed officials.
The S&P 500 SPX, -0.26% was down 4 points, or 0.2%, at 2,155, with nearly all main sectors trading lower. Telecoms and utilities were leading decliners, down about 1%, while energy shares were following oil prices, giving up earlier gains.
“After a bounce on Tuesday, which was mostly due to a technical rally after three days of selling, markets do not have any positive or overly negative news to react to,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.
The Dow Jones Industrial Average DJIA, -0.16% was off 19 points, or 0.1%, to 18,209 with Nike Inc. NKE, -2.55% leading losses, down 2.1%.
The Nasdaq Composite Index COMP, -0.27% declined 10 points, or 0.2%, to 5,395.
“The market has been slowly grinding higher [over the past year] primarily because investors have nowhere else to turn,” said Kim Caughey Forrest, senior analyst and portfolio manager at Fort Pitt Capital Group.
Forrest noted that investors are cognizant of what’s going on with oil prices as well as Deutsche Bank concerns.
“Oil prices continue to trade around $40-$45 a barrel when by now experts told us it would be around $60. This means that earnings of energy companies will continue to struggle in the third quarter,” Forrest said.
According to FactSet, the estimated earnings decline for the S&P 500 in the third quarter is 2.3%, largely dragged down by drop in earnings in the energy sector.
Oil meeting: Crude-oil prices CLX6, -0.54% gave up earlier gains and turned negative to trade at $44.66 as energy traders watched for headlines from a meeting of the Organization of the Petroleum Exporting Countries that is expected to end with no deal to freeze output.
Read: Why China is the oil ‘wild card’ that could overrule any OPEC moves
Meanwhile, Deutsche Bank AG’s U.S.-listed shares DB, +1.05% DBK, +1.25% trimmed earlier gains to trade 0.8% higher following news the troubled German lender is selling an insurance business, as the country’s government denied a report it is readying a rescue plan for the bank.
See: Deutsche Bank’s woes not a Lehman moment, says UBS chairman
The Fed front: St. Louis Fed President Jim Bullard is expected to deliver opening remarks at the St. Louis Fed’s conference on community banking at 10:15 a.m. Eastern. Chicago Fed President Charles Evans is slated to speak at 1:30 p.m. Eastern about the economy at that same confab.
Cleveland Fed President Loretta Mester is expected to make remarks on the economic outlook and monetary policy at a forum in the Cleveland area at 4:35 p.m. Eastern.
Kansas City Fed President Esther George will give a speech at the Forum for Minority Bankers, speaking about the economy, payments system and leadership strategies.
In other economic news, orders for durable or long-lasting goods flattened out in August after a sizable gain in the prior month, pointing to ongoing difficulties for American manufacturers.
Check out: MarketWatch’s Economic Calendar
Other markets: European stocks SXXP, +0.59% climbed, while Asian markets closed mostly lower. Gold futures GCZ6, -0.63% inched down, and a key dollar index DXY, +0.25% edged up.
Corporate news: Shares in Tempur Sealy International Inc. TPX, -23.95% dived 23% after the mattress company lowered its 2016 guidance late Tuesday.
Nike Inc.’s stock NKE, -2.55% lost 1.7% as the sportswear giant’s quarterly report late Tuesday indicated a slowdown in growth for a measure of future sales.
Alphabet Inc. GOOG, -0.71% GOOGL, -0.62% was 0.7% lower after Google’s parent company was downgraded to underperform at Wedbush, which cited concerns about a new approach for the company’s search ads.
BlackBerry Ltd. BBRY, +3.62% shares jumped 4.3% after the ailing smartphone company raised its full-year outlook and named a new chief financial officer.
Embattled banking giant Wells Fargo & Co. WFC, -0.04% said late Tuesday that the company’s head of community banking, Carrie Tolstedt, has left the company. At the same time, CEO John Stumpf has recused himself from a probe and agreed to forfeit outstanding equity awards worth about $41 million. Wells Fargo, rocked by a scandal involving employees opening accounts without customers’ knowledge, also said independent directors and a law firm are investigating its practices. Shares rose 0.7%.
