LONDON: U.S. stocks accelerated losses in the final hour of trade Thursday to close near session lows, as tanking oil prices helped fuel a selloff in the energy and materials sectors.
A parade of Federal Reserve speakers, some telegraphing a December rate hike, contributed to a rough day for stock investors.
The S&P 500 SPX, -1.40% dropped 29.03 points, or 1.4%, to close at 2,045.97, with all 10 main sectors trading lower, with energy and materials both showing falls of at least 2%.
The S&P 500 has fallen in six of the past seven sessions amid rate-hike talk. Thursday’s decline put the stock-market benchmark back in negative territory for the year, off 0.6%.
The Dow Jones Industrial Average DJIA, -1.44% tumbled 254.15 points, or 1.4%, to 17,448.07, with 28 out of 30 blue-chip companies trading in negative territory, led by Caterpillar Inc. CAT, -4.52% down 4.5%, and Exxon Mobil Corp. XOM, -2.71% 2.7% lower.
Meanwhile, the Nasdaq Composite COMP, -1.22% fell 61.94 points, or 1.2%, to close at 5,005.08.
Investors took remarks from Fed speakers early Thursday as fresh a signal that the Fed is coming close to committing to an interest-rate increase in December.
Speaking at the Cato Institute, St. Louis Fed President James Bullard said it was prudent to raise rates and shrink the Federal Reserve’s balance sheet toward more “normal settings.” Meanwhile, Richmond Fed President Jeffrey Lacker said he doesn’t think that recent low inflation “implies a more permanent departure from our target.”
New York Fed President William Dudley also suggested a rate hike could come in December. Fed Chairwoman Janet Yellen avoided comments on a rate hike in Thursday remarks and that made dollar DXY, +0.14% bulls nervous.
Thursday’s shaky market was sparked by Fed speakers, said Paul Nolte, portfolio manager at Kingsview Asset Management.
“Markets are struggling: How do we read this?” said Nolte. “Now everybody is lining up on the side of raising rates. The data hasn’t changed that much from October. Why didn’t they raise then?”
“The Fed lost a lot of credibility in the September meeting where they expanded the focus from managing inflation and looking at employment,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “I guess the Fed hellbent on raising rates in December has more to do with they’re out of ammunition if there’s a downturn.”
