US close: Stocks close lower as tumbling oil prices reverse afternoon rally
By Iain Gilbert
Date: Tuesday 13 Nov 2018
(Sharecast News) - US stocks closed mostly lower on Tuesday as a late push was offset by plummeting oil prices cratered, dragging the energy sector sharply lower.
At the close, the Dow Jones Industrial Average was down 0.40% to 25,286.49, while the S&P 500 closed 0.15% softer at 2,722.18 and the Nasdaq closed out the session flat on 7,200.87.
December West Texas Intermediate oil tumbled 7.76% to $55.69 a barrel, marking the twelfth consecutive daily decline as it hit the lowest front-month figure in almost twelve months.
Donald Trump voiced disapproval over a potential production cut by Saudi Arabia and OPEC, tweeting out that prices "should be much lower based on supply!"
Wall Street had sustained a bout of heavy profit-taking the day before, with the Dow Industrials retreating by roughly 600 points, as Apple led tech shares lower after a number of chip suppliers warned on their future earnings outlook, citing weaker mobile phone demand.
"This really shouldn't have come as a shock given the break down in Apple's numbers earlier this month, the surprise is that investors took so long to put two and two together," said CMC Markets analyst Michael Hewson.
"The decision to stop reporting the unit sales numbers for iPhones, iPads and other individual products should have clued investors in to begin with, along with the slight miss on handset sales."
Elsewhere, there were signs of a small thaw in Sino-US relations following reports that China's top trade negotiator was preparing to visit the US ahead of the G20 summit later this month, supplemented by positive remarks from National Economic Council head, Larry Kudlow, on CNBC, just after the opening bell.
On the macro front, small business sentiment in the US deteriorated in October, according to the National Federation of Independent Business.
The small business optimism index ticked down to 107.4 from 107.9 in September, slightly below consensus expectations of 108.0.
Pantheon Macroeconomics noted that the index was dragged down a by three-point fall in the "good time to expand" index, a two-point decline in earnings expectations and one-point dips in hiring and inventory plans.
"Further declines in the headline are likely, because the economic expectations component, which is very sensitive to the stock market, was unchanged in October; we expect it to fall in November," said Pantheon analyst Ian Shepherdson.
Elsewhere, the data calendar was fairly quiet, with the focus on US Fed speakers Kashkari, Brainard and Harker.
Trump, who spent much of the morning lambasting French President Emmanuel Macron on Twitter, is scheduled to meet with his trade team today to discuss auto tariffs.
In corporate news, Home Depot closed 0.31% lower despite its third-quarter earnings beating expectations, leading it to lift its sales and earnings guidance.
Advance Auto Parts shares collected 10.62% throughout the session on the back of its third-quarter earnings.
Caterpillar shares rose picked up 0.82% despite revealing a continued deceleration in its sales growth.
Boeing created 2.11% after it was revealed it had withheld information regarding a new stall-all prevention system from its managers and pilots.
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