By Abhiram Nandakumar
REUTERS – Wall Street was lower on Thursday morning, ahead of the long Easter weekend, as a stronger dollar weighed on crude oil.
The dollar was on track for its best streak of gains in almost a year after comments by U.S. Federal Reserve policymakers suggested support for more than one increase in interest rates this year.
St Louis Fed President James Bullard, a voting member of the Federal Open Market Committee, became the latest official to take a hawkish stance after he said on Thursday that another rate hike may not be far off.
The comments by Fed officials come after Fed Chair Janet Yellen adopted a cautious tone on raising rates and said the central bank remains data dependant and wary of weak global financial and economic conditions.
Investors will now assess data to gauge the health of the economy as they begin to price in the possibility of more rate hikes in 2016 than anticipated.
“You’ve had a pretty good recovery here now, and it seems like risk-reward certainly isn’t as attractive,” said Aaron Clark, a portfolio manager at GW&K Investment Management in Boston.
At 9:37 a.m. ET (1337 GMT), the Dow Jones industrial average was down 86.57 points, or 0.49 percent, at 17,416.02, the S&P 500 was down 12.77 points, or 0.63 percent, at 2,023.94 and the Nasdaq Composite was down 25.24 points, or 0.53 percent, at 4,743.62.
Nine of the 10 major S&P sectors were lower, led by the 1.4 percent fall in the financial sector.
Wells Fargo was down 1.7 percent at $ 48.91 after UBS started coverage of the bank with a “sell” rating. The stock was the biggest drag on the S&P 500.
Data on Thursday showed durable goods orders fell less than estimated in February, while better-than-expected jobless claims data showed the labor market was stronger than previously thought.
Oil prices, which had recovered from a rout that sent both benchmarks to multi-year lows, fell below $ 40 a barrel as U.S. crude inventories touched record highs.
Staples shares were up 6.5 percent at $ 10.71 after a report said a U.S. judge rebuked the Federal Trade Commission’s legal tactics in the Staples and Office Depot merger case.
PVH Corp was up 5 percent, while Signet Jewelers and Accenture were up about 3.5 percent after strong quarterly results.
Declining issues outnumbered advancing ones on the NYSE by 2,299 to 362. On the Nasdaq, 1,819 issues fell and 412 rose.
The S&P 500 index showed two new 52-week highs and no new lows, while the Nasdaq recorded three new highs and 31 new lows.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D’Silva)
