Dow off 159, negative for 2015 as U.S. oil slides below $40
U.S. stocks on Wednesday stayed mixed in a tight range even after fresh signals of a December rate hike from Janet Yellen — but then all three major benchmarks sank and finished down as news spread of a reported mass shooting in California.
Oil sold in U.S. markets slid more than 4% to break under $40 a barrel, as inventories climbed. The Dow Jones industrial average, off 159 points, slipped into negative territory for 2015.
The S&P 500 lost 1.1% on the day, the Dow shed 0.9% and the Nasdaq composite fell 0.6% lower.
Obama mourns passing of Saudi king
In a midday speech, Federal Reserve chair Yellen suggested that, yes, a rate hike this month is in the cards. Stocks initially held their mixed positions on the news and as investors looked ahead to Thursday's key policy meeting at the European Central Bank and Friday's U.S. employment report.
Details of the reported mass shooting in San Bernardino, Calif., were slow to trickle out as the markets headed toward the 4 p.m. close, with early reports suggesting more than one shooter was involved.
An individual standout amid the downturn was Yahoo, with YHOO shares ending up 5.8% on speculation the embattled tech icon may be snapped up by an unspecified buyer.
Fed's Yellen: Economy is ready for rate hike
Yellen signaled in her Washington speech Wednesday that the Fed is all but certain to raise interest rates this month for the first time in nearly a decade, saying that gains in the economy and labor market have met the central bank's goals.
While December has a reputation as a seasonally strong period for stocks, ranking first in performance over the past 100 years, investors are still exercising caution as they digest the implications of what will likely be the first interest rate hike later this month from the Fed in nearly a decade and more easing from the ECB.
Wall Street is still trying to discern if the health of the U.S. economy is vibrant enough to cope with rising rates, especially after yesterday's reading on U.S. manufacturing in November, which contracted for the first time since the end of 2012.
Obama mourns passing of Saudi king
Twitter co-founder Evan Williams gives shares to family foundation
On the first day of trading in Decmeber, the broad U.S. stock market rose about 1%, following a tiny gain in November and a rally of more than 8% in October.
Wall Street is closely monitoring a speech happening now by Fed chair Janet Yellen at the Economic Club of Washington. Investors will be looking for any clues as to the Fed's rate-hike plans.
On Wednesday's economic docket, Wall Street got the November reading on job creation in the private sector. The ADP report topped expectations, with private employers adding 217,000 jobs last month, topping the 192,000 that had analysts had forecast. October job gains were also revised up by 14,000 to 196,000.
The strong employment report affirms the strength in the labor market and adds credence to the expectation that the Fed will move on Dec. 16 to raise rates for the first time since 2006.
Stocks in Europe ended mixed after earlier gains. The broad Stoxx Europe 600 was flat, after rallying 0.5% earlier in the session. Germany's DAX was down 0.6% after being up 0.4%, the CAC 40 in Paris ended 0.2% lower and the FTSE of Britain gained 0.4%.
Contributing: Paul Davidson.
Adam Shell on Twitter: @adamshell.