Stocks Finish Mixed on Weakness in Oil

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U.S. equities finished mixed in another quiet session of trading on Tuesday. Investors continue to largely watch from the sidelines ahead of the long Labor Day holiday weekend and Friday’s big August jobs report release.

In the end, the Dow Jones Industrial Average lost 0.3%, the S&P 500 Index lost 0.2%, the Nasdaq Composite lost 0.2% and the Russell 2000 gained 0.1%. Elsewhere: Treasury bonds weakened, the dollar strengthened, gold lost 1% and the price of crude oil fell 1.2%.

Headlines continued to focus on the Federal Reserve and a possible OPEC production freeze agreement in September. On the latter, Iraq’s Prime Minister Abadi said his country would support such an agreement at the upcoming meeting in Algiers.

Fed Vice-chairman Stanley Fischer tempered his hawkish commentary from last week, saying the rate path continues to depend on the economic data and that labor productivity — that latest worry — is very slow at the moment. Other comments focused on negative interest rates, saying that while the Fed isn’t actively considering them now they seem to be working in Japan and Europe.

Fischer’s comments pushed the dollar towards two-week highs ahead of Wednesday’s private-sector ADP employment report. Analysts are looking for the ADP number to come in at 175,000, down slightly from the 179,000 last month.

BAC-stock

Financial stocks led the way with a 0.8% gain on net interest margin hopes associated with higher long-term interest rates. That pushed the September $15 options straddle in Bank of America Corp (NYSE:BAC) recommended to Edge Pro subscribers to a gain of nearly 40% since recommended on August 16.

United Continental Holdings Inc (NYSE:UAL) gained 8.6% after announcing it had appointed American Airlines Group Inc (NASDAQ:AAL) President Scott Kirby as its own. Hershey Co (NYSE:HSY) fell 10.8% after Mondelez (NASDAQ:MDLZ) abandoned its pursuit of the company. Apple Inc. (NASDAQ:AAPL) fell 0.8% after the European Commission imposed a record $15 billion tax fine, to which Tim Cook fired back.

And finally, Japanese officials increased their verbal currency intervention overnight by saying they are preparing to take action on the yen — which has been increasing in strength lately. The Ministry of Finance could actively intervene to weaken the yen or pressure the Bank of Japan to buy foreign stocks. That boosted the UltraShort Yen (NYSEARCA:YCS) position recommended to Edge subscribers by 2.2%.

As a reminder, a weaker yen tends to boost currency carry trades that have been a frequent theme of the post-2009 uptrend. But there’s a catch: The associated strength in the U.S. dollar would further weaken corporate earnings and could weigh on crude oil.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/08/oil-price-jobs-report-fed-stock-market-today-nyse-dow-jones-industrial-average-investing-news-5/.

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