“Markets are a little bit fatigued after charging higher since late September, which saw the S&P 500 retrace all of the falls since China first announced currency devaluation,” said Ryan Larson, head of equity trading at RBC Global Asset Management.
“It’s not uncharacteristic for markets to pause in a week light on news and catalysts,” Larson said.
Market participants said trading volumes were lower than usual as bond markets and banks closed in observance of Veterans Day.
The S&P 500 gave up 6.72 points, or 0.3%, to close at 2,075.00. Energy, off 1.9%, and health-care, 0.9% lower, led losses. The broad-market index has been down five of the past six sessions. A nearly 3% tumble in West Texas Intermediate crude oil, sparked by a renewed concern of a U.S. supply gut, resulted in oil prices sinking below $43 a barrel.
The Dow Jones Industrial Average shed 55.99 points, or 0.3%, to close at 17,702.22. The Nasdaq Composite ended the day down 16.22 points, or 0.3%, at 5,067.02.
The most recent moves by U.S. stocks suggest “that markets have finally priced in Friday’s nonfarm payrolls surprise and the potential for a more hawkish Fed,” said Colin Cieszynski, chief market strategist at CMC Markets, in a Wednesday research note. The blowout October jobs report released Nov. 6 is widely viewed as having given the Federal Reserve the green light to raise rates next month.
In corporate news, Anheuser-Busch InBev NV early Wednesday said it had formally agreed to buy SABMiller PLC for about $106 billion, as SABMiller agreed to sell its 58% stake in the MillerCoors LLC joint venture to its partner Molson Coors Brewing Co. . That sale of MillerCoors is necessary for AB InBev to get approval from U.S. regulators to buy SABMiller. Molson Coors Brewing shares rose 4.4%, while American depositary receipts of Anheuser-Busch rose 2.2%.
“The merger news between brewers and record corporate debt issuance suggests there is more M&A activity to come, which should be supportive for the market, as companies usually pay a premium when buying other companies,” said Chris Gaffney, president at EverBank World Markets.
However, Gaffney warned that if earnings growth and consumer spending don’t improve over the next few quarters, markets may need to reprice.
“We saw wage inflation in the last jobs report but it’s only one report. Consumers will need to start spending their savings from lower gasoline prices. If it doesn’t happen, we might see another correction,” Gaffney said.
Macy’s Inc. shares closed about 14% lower after the retailer reported weaker-than-expected third-quarter sales and cut its guidance for the year. The department-store chain said it won’t pursue a spinoff of its real-estate assets.
Also read: Investors fear Macy’s is a red flag for other retailers
Meanwhile, oil companies faced another selloff as crude-oil futures dropped sharply on rising supply fears. Oil futures fell 2.9% to settle at $42.93 a barrel. Among biggest decliners on the S&P 500 were Marathon Oil Corp. and Cabot Oil & Gas Corp which both fell nearly 8%.
Read: What falling copper prices say about the world economy
Other markets: Asian stock markets closed mostly higher, and European stocks finished higher. China’s industrial output rose 5.6% in October, below expectations and suggesting the worst may not be over as that economy decelerates.
Gold futures settled lower, falling 0.3%, to $1,084.90 an ounce, it’s lowest level in more than five years. The U.S. Dollar Index, a measure of the dollar’s strength against a basket of rivals, dropped 0.3% to 98.970.
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