Stocks end lower, S&P 500 snaps 5-month win streak
Wall Street shares dipped lower on the final trading day of August, a month that has been void of market scares, as traders look ahead to a key jobs report Friday and a Federal Reseve decision on interest rates in late September.
The S&P 500 closed 0.2% lower, the Dow Jones industrial average ended down 53 points, or 0.3%, and the Nasdaq composite was off 0.2%. Stocks were weighed down by a 3% drop in oil prices.
Both the S&P 500 and Dow ended the month basically flat, each posting a fractional loss. The S&P 500 snapped a five-month winning streak, CNBC reported.
To say August lived up to its reputation as the dog days of summer would be an understatement. The U.S. stock market has been tranquil, with the Standard & Poor's 500 stock index up just 0.1% heading into the final trading day of August and not moving 1% or more in either direction a single day this month.
The market calm, however, might not continue as investors brace for what could be a market-moving September. The first big event comes Friday, when the government releases the August jobs report. If the number comes in strong, or around or above the 180,000 jobs economists' forecast, it could boost the odds of a Fed rate hike at the central bank's Sept. 20-21 meeting.
The Fed has kept rates steady all year, after boosting rates off zero back in December, its first rate hike in nearly a decade. Wall Street is not set up for a September rate hike, and is betting the first hike in 2016 won't come until December at the earliest. If the Fed moves earlier than expected, market volatility is likely to elevate quickly.
In economic news Wednesday, payroll processor ADP reported that private employers created 177,000 new jobs in August, above the 175,000 jobs forecast. The solid ADP employment number could signal a strong jobs report Friday.
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Stocks are also entering a seasonally weak stretch, as the September is the worst-performing month for the Dow going back 100 years and 50 years, according to Bespoke Investment Group.
Equities are also confronted with a rising dollar, which has gained strength vs. a basket of foreign currencies for the fourth straight session. A stronger dollar hurts the competitiveness and earnings of U.S. companies that do a lot of business abroad, and weighs on oil prices, which are priced in dollars.
U.S.-produced crude was off $1.65, or more than 3%, to $44.70 per barrel. Sparking the fall was the weekly report from the Energy Information Administration (EIA) that showed U.S. stockpiles climbed by 2.3 million barrels -- more than double the increase expected.
The yield on the 10-year Treasury note was slightly lower at 1.567%.
In foreign markets, Japan's Nikkei 225 stock index closed 1% higher. Stocks in Europe were lower, with the broad Stoxx Europe 600 closing down 0.4%