“For the most part, everyone’s pretty much waiting for Yellen”, said Mazen Issa, senior currency strategist at TD Securities in NY.
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The price of crude oil has recently benefited from optimism that a meeting of oil-producing nations next month could lead to curtailed production.
“This morning’s action is predicated on the perception of what’s going to happen in Jackson Hole as well with the weakness in oil prices which have had an impressive run in recent weeks”, said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
The Dow Jones industrial average lost 67 points, or 0.4 percent, to 18,487 as of 9:50 a.m. Pfizer is buying Medivation for its heavily used prostate cancer drug Xtandi, which generates roughly $2 billion in sales a year.
The board was divided on the near-term danger of inflation, with some seeing little threat but others anxious that there could be a sudden upward push on prices as the jobs market tightens. Regeneron Pharmaceuticals, Vertex Pharmaceuticals and Alexion Pharmaceuticals all were up 3 percent or more.
The S&P 500 index showed 11 new 52-week highs and no new lows, while the Nasdaq recorded 81 new highs and 15 new lows.
But the price decline, which briefly pushed the 10-year yield rise above 1.59%, was soon reversed in light trade.
USA benchmark crude lost $1.39 to $47.71 a barrel and Brent crude, used to price oil internationally, declined $1.47 to $49.41 a barrel. Brazil’s Ibovespa dropped the most among the world’s biggest stock markets.
The local stock barometer firmed up on Monday as investors loaded up on property shares ahead of US Federal Reserve chair Janet Yellen’s closely watched speech in Jackson Hole.
Bank of Tokyo Mitsubishi analyst, Lee Hardman, said he expected the Fed chair to remain cautious and refrain from signalling when the central bank will raise rates. Tipp said the Fed wants the door to be open for a September hike, though it’s highly unlikely it would act then. Second quarter earnings season is effectively over and the next major piece of economic data does not come until Friday, when Yellen will speak. September West Texas Intermediate crude (http://www.marketwatch.com/story/oil-prices-hammered-by-increase-in-us-rig-count-2016-08-22) slumped 3%, with some analysts blaming a rise in the USA oil-rig count last week.
Treasury yields fell ahead of Yellen’s speech, which will be scrutinized by investors.
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Oil prices faltered as China ramped up exports of refined products, with its July diesel and gasoline exports soaring 181.8 percent and 145.2 percent, respectively, from the same month past year, putting pressure on refined product margins.
