US stocks dip as oil prices drop to their lowest point since early July

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Stocks have fallen on Thursday, led by sharp losses in the energy sector, as investors took a break from the rally seen this month.

The Dow Jones Industrial Average was down 172 points, or 0.4%. The S&P 500 shed 0.2%, as did the Nasdaq Composite.

Oil prices dropped to their lowest point since early July, prompting OPEC+ to contemplate extending and intensifying production cuts during their upcoming meeting in Vienna in response to Brent crude's 5.2% decline to just below $77 a barrel and West Texas Intermediate's 5.5% drop to $72.48 a barrel, which is below the critical $80 level for Saudi Arabia and Russia's government budgets.

Chevron was down 2%, while the S&P 500 energy sector fell nearly 3%, on pace for its worst day in more than a month. The West Texas Intermediate December contract tumbled more than 5%. Communication Services are performing the best.

Shares of Cisco Systems dropped nearly 12% after the company offered weak guidance for the current quarter and full fiscal year. Palo Alto Networks shed 6% after the cybersecurity company issued a dismal forecast on billings. Walmart fell more than 7% after the retail giant lowered its expected earnings forecast for the year. Macy’s popped 5% after the company topped fiscal third-quarter earnings estimates.

Better-than-expected inflation data has boosted stocks this month. With November about halfway through, the S&P 500 is up more than 7% for the month, while the Dow has advanced more than 5%. The Nasdaq has leapt over 9% in the period.

October’s producer price index, a gauge of wholesale prices, slid 0.5%. That marked its biggest monthly decline since April 2020.

That came a day after the consumer price index remained flat for October, another encouraging sign for investors hoping the Federal Reserve has seen the path of inflation cool enough to stop hiking interest rates. Tuesday’s session brought the biggest gains for the S&P 500 and Nasdaq since April.

When assessing the lithium sector, Chilean miner SQM, the world’s second-largest lithium producer, said it expects excess inventory and rising supply to continue to have a negative impact on lithium prices. SQM is pursuing a $1.6 billion takeover of Azure Minerals. 

Currency

One Australian dollar at 7:40 AM was buying 64.65 US cents.

Figures around the globe

European markets closed mixed. London’s FTSE fell 1.01 per cent, Frankfurt added 0.24 per cent, and Paris closed 0.57 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei lost 0.28 per cent, Hong Kong’s Hang Seng fell 1.36 per cent while China’s Shanghai Composite closed 0.71 per cent lower.

The Australian share market closed 0.67 per cent lower at 7058.

Ex-dividends
Soul Pattinson (W.H) (ASX:SOL) is paying 51 cents fully franked

Dividends payable
Cromwell Property Group (ASX:CMW)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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