Stocks Pivotal Shift: Focus on Federal Reserve Fades as Commodity Market Takes Center Stage

Thursday's Wall Street session saw stocks pivot toward the commodities market, indicating a shift in focus from the Federal Reserve's announcement of a rate hike. The S&P 500 declined 0.9%, the Dow Jones Industrial Average fell 0.76%, and the Nasdaq slid 0.69% as crude oil prices continued to drop. West Texas Intermediate crude oil fell 2.3% to $34.69 a barrel due to recent data on U.S. inventories, which stoked fears of a supply glut. Major oil companies, including Chevron, Kinder Morgan, PetroChina, Royal Dutch Shell, and BP, fell, while the Energy Select Sector SPDR ETF slid 1.9%. Markets had rallied on Wednesday after months of uncertainty over rate hikes came to an end, with the S&P 500 up 1.5%, the Dow Jones Industrial Average adding 1.3%, and the Nasdaq rising 1.5%.

Key Takeaways:

• Stocks showed a decline in Thursday's session, with the S&P 500 down 0.9%, the Dow Jones Industrial Average falling 0.76%, and the Nasdaq sliding 0.69%.
• Crude oil prices continued to drop, with West Texas Intermediate crude oil falling 2.3% to $34.69 a barrel due to recent data on U.S. inventories.
• Major oil companies, including Chevron, Kinder Morgan, PetroChina, Royal Dutch Shell, and BP, fell, while the Energy Select Sector SPDR ETF slid 1.9%.
• Markets had rallied on Wednesday after months of uncertainty over rate hikes came to an end, with the S&P 500 up 1.5%, the Dow Jones Industrial Average adding 1.3%, and the Nasdaq rising 1.5%.
• The Federal Reserve's rate hike announcement was seen as a pre-emptive measure to give the central bank room to move in case of a downturn, according to Fed Chair Janet Yellen.
• A number of major banks increased their prime rates on Wednesday afternoon, including Wells Fargo, USB, and Bank of America.
• The number of new claims for unemployment benefits in the U.S. fell 11,000 to 271,000 in the past week, slightly less than analysts' expectations.
• Business activity in the Philadelphia region contracted in December, with the Philadelphia Fed index falling to negative 5.9 over the month.
• Apple named Jeff Williams as its new chief operating officer and Johny Srouji as its new senior vice president for hardware technologies.
• Pharmaceutical entrepreneur and CEO of Turing Pharmaceuticals, Martin Shkreli, was arrested Thursday morning by federal authorities on charges of securities fraud.
• General Mills fell nearly 1% after a disappointing second quarter and downbeat outlook.
• Avon Products soared more than 25% after receiving a $605 million investment from Cerberus Capital Management.
• U.K. drugmaker AstraZeneca agreed to buy a 55% stake in Dutch drug company Acerta Pharma for $4 billion.

Statistics:

• The S&P 500 declined 0.9% in Thursday's session.
• The Dow Jones Industrial Average fell 0.76% on Thursday.
• The Nasdaq slid 0.69% on Thursday.
• Crude oil prices dropped 2.3% to $34.69 a barrel.
• The Energy Select Sector SPDR ETF slid 1.9%.
• The number of new claims for unemployment benefits in the U.S. fell to 271,000 in the past week.
• Business activity in the Philadelphia region contracted in December, with the Philadelphia Fed index falling to negative 5.9 over the month.
• Apple named Jeff Williams as its new chief operating officer after 17 years with the company.
• Avon Products soared more than 25% after receiving a $605 million investment from Cerberus Capital Management.

Sources:

• "Fed Acts: Rates New Chapter Begins?" by Brad McMillan, Commonwealth Financial Network, 12/16/2015.
• "Cerberus Nears Deal to Buy 80% of Avon's North American Business for $170 Million" by Ben Fox Rubin, The Wall Street Journal, 12/15/2015.
• "Fed Raises Interest Rates, Doubles Down on Hawkish Stance" by Anne Srnec, Reuters, 12/16/2015.
• "AstraZeneca to Buy 55% Stake in Dutch Drug Company Acerta Pharma for $4 Billion" by Ben Fox Rubin, The Wall Street Journal, 12/16/2015.