Wall St pulls back as oil dips

The ASX is set for a downbeat open after US investors remained cautious and crude stockpiles rose.

US stocks slipped as investors remain cautious. Picture: AP Photo/Mark Lennihan.

US stocks slipped in quiet trade overnight, while the price of oil took a fresh fall.

Across the Atlantic, European shares finished mixed amid upbeat economic growth data from Germany and weak results from Glencore.

The Australian share market is set to follow the US lead and fall at this morning’s open, with ASX futures down 13 points.

The Dow Jones Industrial Average fell 66 points, or 0.4 per cent, to 18481. The S&P 500 dropped 0.5 per cent and the Nasdaq Composite declined 0.8 per cent.

The slight pullback came a day after major stock indexes flirted with all-time highs. The S&P 500 has hit new records 11 times since early July.

Still, investors remain cautious.

“People see new highs and they automatically assume the market is going to collapse,” said Craig Hodges, chief executive of Dallas-based Hodges Capital Management. “No one wants to be in the market, they don’t trust the market. To me we are in a bull market and no one realizes it.”

Oil and metals prices both declined, weighing on mining companies. US-traded crude oil declined 2.8 per cent to $US46.77 a barrel, reversing Tuesday’s gains as reports of additional US crude stocks overshadowed hopes Iran could agree to a production-freeze accord. Gold fell 1.2 per cent to $US1,324.40 an ounce.

The S&P 500 materials sector fell 1.2 per cent. Freeport-McMoRan fell 7.5 per cent, and Newmont Mining lost 7.7 per cent.

The Stoxx Europe 600 rose 0.4 per cent as advances in banks and media companies offset declines in the basic-resources sector. Shares of Glencore dropped 3.1 per cent, leading the sector lower, after the commodities and mining group released disappointing first-half results.

With few major catalysts on the economic calendar, the bulk of market attention was focused on Friday’s Jackson Hole conference, where US Federal Reserve Chairwoman Janet Yellen is slated to speak. Any clues on the timing of the next interest-rate rise could steer the dollar and offer fresh direction for markets, analysts say.

“Everyone’s sitting on their hands waiting,” said Justin Wiggs, managing director in equity trading at Stifel Nicolaus. “I’m astounded. No one is taking big bets.”

Market volatility has ground to a halt in recent weeks, with many traders away from their desks for summer holidays. For 32 consecutive sessions, the S&P 500 index hasn’t moved more than 1 per cent in either direction, a contrast from last August’s China-triggered volatility.

The yield on the 10-year Treasury note was at 1.558 per cent, compared with 1.553 per cent Tuesday.

The WSJ Dollar Index, which measures the greenback against a basket of 16 currencies, inched up 0.3 per cent Wednesday.

Earlier Wednesday, shares in Asia were mixed. Stocks in Hong Kong shed 0.8 per cent, weighed by property companies. Japan’s Nikkei Stock Average rose 0.6 per cent as the dollar gained slightly against the yen, supporting shares of exporters.

The US dollar was recently up 0.2 per cent against the yen at Yen100.496, while the euro was down 0.4 per cent against the dollar at $US1.126.

Dow Jones