Wall Street slips at open on weak oil prices; Fed minutes in focus

 A trader works on the floor of the New York Stock Exchange in the US on Feb 10, 2017.
A trader works on the floor of the New York Stock Exchange in the US on Feb 10, 2017. PHOTO: BLOOMBERG

WASHINGTON (REUTERS) - US stocks slipped Wednesday as a drop in oil prices weighed on the energy sector, while investors awaited the minutes of the Federal Reserve's most recent policy meeting for clues on the timing of the next interest rate hike.

Oil prices fell 1.2 per cent to $55.99 as the dollar gained in strength. The S&P 500 energy sector slipped 0.64 per cent and was the top drag on the broader index.

Investors were focused on the minutes of the Fed's Jan. 31-Feb. 1 meeting, expected at 2:00 p.m. ET (3.00 am Singapore time).

Policymakers, including Fed Chair Janet Yellen, have been hinting at the possibility of a rate hike sooner than later. But traders have priced in slim chances of a move until June, even with the backdrop of strong economic data.

The odds of a rate hike stand at 22 per cent for March, 47 per cent for May and 69 per cent for June, according to Thomson Reuters data. "The market has priced in rate hikes and is welcoming it,"said Andre Bakhos, managing director at Janlyn capital in Bernardsville, New Jersey. "But the one thing that could derail it is if it comes all of a sudden." Also on investors' minds is how the Fed views uncertainty regarding economic policy under President Donald Trump.

Mr Trump's promises of tax and regulatory reforms as well as fiscal stimulus have boosted investors' confidence, helping send Wall Street to record highs.

At 9:41 a.m. ET, the Dow Jones industrial average was down 43.27 points, or 0.21 per cent, at 20,699.73, the S&P 500 was down 6.28 points, or 0.26 per cent, at 2,359.1 and the Nasdaq Composite was down 14.64 points, or 0.25 per cent, at 5,851.31.

Seven of the 11 major S&P sectors were lower, with financials adding to the decline. Real estate, utilities and health were the outliers.