Wall Street dips as Facebook and energy stock weigh

Facebook's 1.1 per cent fall weighed the most on the S&P 500 and Nasdaq.
Facebook's 1.1 per cent fall weighed the most on the S&P 500 and Nasdaq.PHOTO: REUTERS

NEW YORK (REUTERS) - Wall Street edged lower on Thursday morning, weighed down by a drop in energy stocks after oil prices dropped and as Facebook led technology shares lower.

Facebook's 1.1 per cent fall weighed the most on the S&P 500 and Nasdaq. The social media giant reported surging quarterly profit and revenue, but investors showed some nervousness about future earnings.

Energy stocks were dragged lower as crude oil prices dropped more than 2.5 per cent to their lowest since late November on concerns over rising global supply. The energy sector fell 1.57 per cent, leading the laggards among the 11 major S&P 500 sectors.

At the other end of the spectrum were financials, which gained 0.65 after a hawkish statement from the Federal Reserve indicated the central bank was on track to raise interest rates in June.

The Fed emphasized the strength of the labour market and said consumer spending continued to be solid, business investment had firmed and inflation has been "running close" to its target. Futures traders are now pricing in a 72 per cent chance of June rate hike, up from 63 per cent before the Fed's statement on Wednesday, according to the CME Group's FedWatch Tool.

"The Fed wrote off the first quarter as being a temporary slowdown and I don't think that's really any surprise as the focus really should be on the jobs report," said Scott Brown, chief economist at Raymond James in Florida, referring to the April US non-farm payrolls data due Friday.

At 9:49 a.m. ET (9:49 p.m. Singapore time) the Dow Jones Industrial Average was down 21.05 points, or 0.1 per cent, at 20,936.85. The S&P 500 was down 1.59 points, or 0.06 per cent, at 2,386.54 and the Nasdaq Composite was down 4.88 points, or 0.08 per cent, at 6,067.68. Earnings of S&P 500 companies have generally come in above expectations, pushing the benchmark index to within one percent of its all-time high.