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U.S. stocks lower despite upbeat JOLTS, Fed’s Beige Book on tap

Published 09/07/2016, 12:14 PM
© Reuters.  Wall Street heads lower ahead of Fed Beige Book, markets weigh Fed rate hike possibility
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Investing.com – Wall Street moved lower on Friday despite an upbeat report on the U.S. labor market while investors continued to weigh the possibility of a rate hike by the Federal Reserve (Fed) this year and waited for the central bank’s report on the economy in the 12 Fed districts.

At 12:11ET (16:11GMT), the Dow 30 lost 29 points, or 0.16%, the S&P 500 fell 4 points, or 0.17%, while the tech-heavy Nasdaq Composite gave up 6 points, or 0.12%.

The Job Openings and Labor Turnover Survey (JOLTS) for July gave a solid reading of the U.S. labor market with job openings hitting an all-time high.

The Fed publishes its Beige Book on the economy at 2:00PM ET (18:00GMT).

San Francisco Fed president John Williams repeated late Tuesday that rates should be raised sooner, rather than later, markets remained skeptical that an increase would happen this year.

Meanwhile, Richmond Fed chief Jeffrey Lacker and Kansas City Fed president Esther George gave testimony Wednesday to the House Committee on Financial Services' subcommittee on Monetary Policy and Trade that focused on governance of the U.S. central bank.

However, George, who voted against the last policy decision because of her preference for a hike, responded to questions stating that the U.S. was at or near full employment, suggesting that the Fed had already completed that part of its dual-mandate.

Lacker, also one of the more hawkish officials, warned that over-stimulating the economy may risk inflation.

Despite the hawkish comments and upbeat data, markets placed only a 15% chance of a hike in September and ruled out a move in December

According to Investing.com's Fed Rate Monitor Tool, odds do not pass the 50% threshold until the February 2017 meeting at 51.7%.

In company news, Apple (NASDAQ:AAPL) were slightly lower ahead of the launch of its new iPhone 7, which is expected to be announced at the company’s annual product launch in San Francisco on Wednesday afternoon.

Shares of Chipotle Mexican Grill (NYSE:CMG) jumped almost 6% after activist investor Bill Ackman's hedge fund took a 9.9% stake in fast-casual Mexican food chain.

Valeant (N:VRX) and Progenics (O:PGNX) were more than 2% higher after they announced the U.S. commercial launch of FDA-approved Relistor tablets.

Elsewhere, oil prices moved higher on Wednesday, as Iran signaled it was prepared to work with Saudi Arabia and Russia to prop up oil prices.

Investors also looked ahead to inventory data later in the session. Due to the Labor Day holiday the American Petroleum Institute will release their inventory data Wednesday while official figures will be released the following day.

U.S. crude oil futures gained 1.45 % to $45.48 at 12:12ET (16:12GMT), while Brent oil rose 1.52% to $47.98.

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