Wall Street pares early gains to close the day lower
- Dow Jones broke above 26K mark before retracing gains.
- Falling crude oil prices weighed on energy shares.
- CBOE Volatility Index rose nearly 15%.
After starting the day slightly higher and extending its gains during the first couple of hours of the session, major equity indexes in the U.S. reversed course and closed the day lower.
The barrel of West Texas Intermediate, which was able to record gains for five straight days and refresh its multi-year highs above $64, lost nearly $1 on the day and settled at $63.73 dragging the S&P 500 Energy Sector (SPNY) 1.23% lower. Commenting on the performance of the sector, “lower energy prices are taking us down a little bit. But, investors are continuing to move into equities as they see returns. It’s feeding on itself, becoming a virtuous cycle, enticing more people in,” Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute in Winston-Salem, North Carolina, told Reuters.
On the other hand, UnitedHealth shares gained more than 2% on the day on upbeat fourth-quarter earnings, lifting the S&P 500 Health Care Sector (SPXHC) 0.46% higher on the day.
In the meantime, the CBOE Volatility Index, Wall Street's fear gauge, rose 15% on the day, showing a low appetite for risk. The risk-sensitive S&P 500 Information Technology Sector finished the day with a 0.41% loss.
At the end of the day, the financial-heavy Dow Jones Industrial Average, which was able to break above the 26K for the first time amid robust earnings numbers from CitiGroup, closed the day 4.34 points, or 0.02%, lower at 25,798.85, the S&P 500 dropped 9.71 points, or 0.35%, to 2,776.53 and the Nasdaq Composite lost 36.16 points, or 0.5%, to 7,224.90.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
