Wall Street slightly lower as fall in oil prices weighs

A drop in Apple shares was partly offset by gains in energy and financial stocks.VIDEO: REUTERS

NEWYORK (REUTERS) - US stocks were slightly lower in early trading on Monday (June 5) as oil prices fell after Arab states cut ties with Qatar over alleged support for Islamists and Iran, while markets mostly shrugged off the weekend attacks in London.

Investors feared that the cutting of ties could hamper a global deal to reduce oil production.

The attack in London on Saturday was the third in Britain in less than three months and came at a time when the country is heading for its general election on Thursday.

Opinion polls in the past week have put Prime Minister Theresa May's Conservatives ahead, though with a narrowing lead over the Labour opposition. "We are looking for a mixed to lower session as international and domestic political worries keep investors on the sidelines," Mr Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note.

US stocks closed at record levels for a second consecutive session on Friday as gains in technology and industrial stocks more than offset a lukewarm job report.

Non-farm payrolls increased by 138,000 in May, well short of the 185,000 expected by economists.

The modest increase, however, could raise concerns about the economy's health after gross domestic product growth slowed in the first quarter.

Despite the disappointing data, market participants still largely anticipate that the US Federal Reserve will raise rates at its June 13-14 meeting, with traders expecting a 90.7-per-cent chance of a quarter-point hike, according to Thomson Reuters data.

The Commerce Department will report factory orders for April, which likely dipped 0.2 per cent, while the Institute for Supply Management's non-manufacturing PMI data for May could drop marginally to 57.0 from 57.5 in April.

"On the macro front, the PMI and factory orders are likely to show positive readings with the employment trend index moving to 133.5 as the solid labour market trend continues," said Mr Cardillo.

At 9.34am local time (9.34pm Singapore time), the Dow Jones Industrial Average was down 20.89 points, or 0.1 per cent, at 21,185.4, the S&P 500 was down 3.84 points, or 0.15 per cent, at 2,435.23. The Nasdaq Composite was down 9.10 points, or 0.14 per cent, at 6,296.70.

Ten of the 11 major S&P 500 sectors were lower, with the energy index's 0.32 per cent fall leading the decliners.