Wall Street Falls on Oil Plunge

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Wall Street Falls on Oil Plunge

US stocks ended lower as losses in energy stocks on a slide in oil prices overshadowed the release of the Federal Reserve’s Policy meeting minutes.

The Dow Jones Industrial Average ended 162.21 points or 0.9% lower at 17,348.38 dragged lower mostly shares of oil giant Chevron Corp which hit their lowest intraday levels in more than a year after falling by 3%.

The S&P 500 Index closed 17.81 or 0.8% lower at 2,079.61 points with eight of its ten key sectors ending lower.

The tech heavy Nasdaq Composite closed 40.30 points or 0.8% lower at 5,019.50 points weighed down by its heaviest weighted component Apple Inc with a 1.3% decline.

Also pressuring commodity prices were concerns over the outlook for demand in Asia with China’s recent devaluation of its currency continuing to send ripples through the market.

“It looks like based on commodity prices, China, wages not really picking up, that [Fed officials] are not getting any closer to meeting their inflation target and seems like they’re probably not going to be willing to go in September with a rate hike,” Don Ellenberger, head of multi-sector strategies at Federated Investors in Pittsburgh, told Reuters.

Stocks attempted to erase some of the early morning losses after the Federal Reserve released the minutes of its last policy meeting latter during the session.

According to the minutes, Federal Reserve policy makers continued to express their concern over the state of the global economy raising hopes among investors that the commencement of its monetary tightening program could be pushed back for some time.

“The Fed may well indeed back off on September,” Brad McMillan, chief investment officer of Commonwealth Financial Network, told the Wall Street Journal

“Some Fed officials expressed qualms about the inflation outlook, which could give them a reason to hold off on a rate increase next month despite labor market improvement.”

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com