Oil Drops on Higher Inventories

Oil prices fell on Wednesday after a surprise build in U.S. crude inventories, while the dollar gave up recent gains as investors awaited direction on a potential interest rate hike.

Wall Street weakened in morning trading after oil turned lower, as energy shares dropped, with stocks losing steam after the Nasdaq and S&P 500 again set record highs on Tuesday.

The Dow Jones industrial average .DJI fell 40.95 points, or 0.22 percent, to 18,492.1, the S&P 500 .SPX lost 6.5 points, or 0.3 percent, to 2,175.24 and the Nasdaq Composite .IXIC dropped 26.05 points, or 0.5 percent, to 5,199.43.

“Low volume is fairly standard at this time of the year and August tends to be a very choppy month,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. “If you have low volumes, it could skew the market in any direction, and that’s what you have today.”

With bond yields low in developed economies as central banks maintain accommodative monetary policies, investors have sought equities for yield.

MSCI’s all-world index .MIWD00000PUS slipped 0.1 percent after rising to a fresh one-year high. MSCI’s emerging markets index .MSCIEF gained 0.4 percent, up for a fifth straight session and hitting its highest in a year.

via Reuters

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