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Stocks in 2017: Oil futures sink and Dow surrenders big gains

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Stocks in 2017: Oil futures sink and Dow surrenders big gains

Stocks in 2017: Oil futures sink and Dow surrenders big gains

Tuesday started the first trading day of 2017 on a positive note but the US stock market traded off intraday highs as oil prices turned sharply lower, removing some of the initial exuberance that underpinned an early triple-digit rise in the Dow Jones Industrial Average.

Although Wall Street experienced a slowdown in the final sessions of 2016, with the S&P 500 dropping 1.1% in its final week of the year, it has been in a fairly pronounced uptrend since early November, when Trump won the 2016 presidential election against Hillary Clinton. While financial stocks have accounted for the lion’s share of the market’s post-election gains, investors are willing to bet that the policies Trump is expected to pursue will encourage further economic growth.

Oil futures CLG7, -2.83%  fell nearly 3% after jumping as much as 2.6% as a deal by OPEC to limit production went into effect last year.

The Dow DJIA, +0.29% rose 20 points, or 0.1%, to 19,782, but had gained as much as 176 points before retreating. Sharp declines in shares of McDonald’s Corp. MCD, -1.96%  and Travelers Cos. Inc. TRV, -1.35% and limited the blue-chip average’s advance.

The Nasdaq Composite Index COMP, +0.46% climbed 16 points, or 0.3%, to 5,399.

The S&P 500 SPX, +0.51% also traded off its best levels, adding 8 points, or 0.4%, to 2,246. The index had been up as much as 25 points in the early morning. Eight of the S&P 500’s 11 primary sectors were trading higher, but most were off their best levels.

“The market is still up but it feels like it’s down given the selloff in the energy,” said Mark Kepner, managing director of sales and trading at Themis Trading.

So what are investors looking for?

Perhaps some investors are taking a wait-and-see approach as Donald Trump prepares to move into the White House to determine if he can deliver on promises of lower taxes and deregulation in a timely fashion. In addition to Trump’s policies, investors will be keeping a close watch on the president-elect’s Twitter feed, which he has used fire shots at specific companies. On Tuesday, he criticized General Motors Co. GM, +0.46% in a tweet, writing that the company “is sending Mexican made model of Chevy Cruze to US car dealers tax-free across border. Make in U.S.A. or pay big border tax!” While the stock fell in premarket trading, it subsequently turned higher, rising 0.4%. The tweet followed similar statements against Boeing Co. BA, +0.65% and Lockheed Martin Corp. LMT, +1.22%

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