Stocks remained mixed by mid-afternoon Wednesday as a selloff in crude resumed.
Crude oil prices fell back into the red on Wednesday despite data showing another decline in crude inventories in the past week. The Energy Information Administration reported a decline of 600,000 barrels in crude stocks over the past week, a welcome sign of diminishing supplies in the face of tepid demand. The American Petroleum Institute reported an increase in U.S. crude oil inventories of 1.4 million barrels overnight.
Crude sold off on Wednesday after the International Energy Agency said global demand growth was slowing by more than previously thought. The energy watchdog predicted the slowdown would continue in 2017. Commodity traders are already nervous over ballooning international supply.
West Texas Intermediate crude oil closed 2.9% lower at $43.58 a barrel on Wednesday.
Markets have moved in a wide range over the past three days as Federal Reserve chatter left investors uncertain which way officials will vote at next week's policy meeting. Chances of an increase in interest rates this month now sit at around 15%, according to CME Group fed funds futures, after welcome dovish remarks from Fed Gov. Lael Brainard at the beginning of the week. The December meeting has higher chances at 45%.
"The set of prevailing conditions do not support further rate hikes, but we do expect most policymakers to hold out hope that a hike could soon be warranted," Morgan Stanley analysts wrote in a note. "This lends itself to the [Federal Open Market Committee] delivering a fairly benign statement that leaves the door open to hiking this year, then lets the incoming data either support it, or push hopes into next year."
Import and export prices in August fell with imports dragged lower by declining fuel and food costs. Import prices declined 0.2%, the first decline in six months and double the expected drop. Export prices fell 0.8%, far sharper than an anticipated 0.1% decline. Soft inflation has been one reason for the Fed's caution in raising rates.
Apple led the Dow for the second day in a row as confidence in the iPhone 7's preorder performance continued to boost investor sentiment. T-Mobile (TMUS - Get Report) and Sprint (S - Get Report) reported robust demand for the new smartphone models in just the three days since they were unveiled. Apple was up 3% on Wednesday.
The world's largest company pulled other tech names into the green, particularly its suppliers. Parts suppliers Cirrus Logic (CRUS - Get Report) , Jabil Circuit (JBL - Get Report) , Broadcom (AVGO - Get Report) and Texas Instruments (TXN - Get Report) each moved higher.
Monsanto (MON) agreed to a $56 billion acquisition by Bayer (BAYRY) after months of negotiations. Bayer has offered $128 a share, a 21% premium to Monsanto's Tuesday close and 44% above its levels in May before the initial offer. The companies expect to receive regulatory approval by the end of next year and, in the case of rejection, Bayer will deliver a $2 billion reverse antitrust breakup fee.
Vitae Pharmaceuticals (VTAE) rocketed 157% higher after Allergan (AGN - Get Report) agreed to acquire the pharmaceutical company in a deal worth $639 million. Allergan offered to purchase Vitae for $21 a share, a 150% premium to its Tuesday close. The deal will supplement Allergan's dermatology product line, introducing treatments for conditions such as psoriasis.
Herbalife (HLF - Get Report) shares were up 5% after billionaire activist Carl Icahn disclosed that he has asked the Federal Trade Commission for the right to buy up to 50% of the supplements maker. Icahn said he is considering delivering a tender offer in comments made to CNBC's Delivering Alpha conference on Tuesday. Icahn already has permission to buy up to 35% while hedge fund manager Bill Ackman, of Pershing Square Capital, expects the company's shares to wither and has built up a short position.
Twitter (TWTR - Get Report) rose 2% ahead of the Wednesday launch of its live-video app for Apple's Apple TV, Amazon.com's Fire TV and Microsoft's Xbox One. The app opens up streaming of NFL, NBA and MLB games. Twitter will livestream its first Thursday Night Football game on Thursday.
Biogen (BIIB - Get Report) climbed nearly 2% on positive clinical and real-world trials of its multiple sclerosis treatment Tecfidera. The pharmaceutical company said the treatment "demonstrates strong efficacy" in reducing disease activity over time.
Cracker Barrel (CBRL - Get Report) fell 6% after issuing weaker-than-expected guidance for its current quarter. The restaurant chain expects current-quarter earnings guidance between $1.75 and $1.85 a share, below analysts' estimates of $1.94 a share. The company reported a better July-ended quarter than analysts expected. b
Ford (F - Get Report) detailed plans to invest in electric and self-driving vehicles over the next several years. The automaker plans to pony up $4.5 billion in research and development towards electric car development by 2020, according to a presentation prepared ahead of its investment day. A fully-autonomous vehicle for use in ride-sharing services is expected to be in commercial production by 2021.
Coach (COH) was reduced to underweight from equal weight at Morgan Stanley. Analysts said the handbag designer is struggling with its turnaround efforts.
Speculation over the outcome of next week's Fed meeting will be rife in the coming days with little in the way of new information on which to trade. No Fed members are left to speak this week, few companies of note are set to report, save Oracle (ORCL - Get Report) on Thursday, and economic data such as producer and consumer prices and retail sales are crammed into a busy Thursday and Friday.
September is historically the worst-performing month for stocks with seasonal factors such as light trading volumes and a general wariness over historical trading patterns. The Dow has fallen an average 1.1% in September since the benchmark index was created in 1896, compared to an average gain of 0.8% over the remaining 11 months.