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US STOCKS-Wall St dips as Facebook and energy stocks weigh
May 4, 2017 / 2:04 PM / in 7 months

US STOCKS-Wall St dips as Facebook and energy stocks weigh

* Oil falls 2.5 pct to lowest since late November

* Facebook falls on worries over future growth

* Traders hike June rate hike odds after Fed statement

* Tesla drops after reporting bigger-than-expected loss

* Indexes down: Dow 0.10 pct, S&P 0.06 pct, Nasdaq 0.08 pct (Updates to open)

By Tanya Agrawal

May 4 (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 percent 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 percent to their lowest since late November on concerns over rising global supply.

The energy sector fell 1.57 percent, 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 labor 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 percent chance of June rate hike, up from 63 percent 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 St. Petersburg, Florida, referring to the April U.S. non-farm payrolls data due Friday.

At 9:49 a.m. ET (1349 GMT) the Dow Jones Industrial Average was down 21.05 points, or 0.1 percent, at 20,936.85.

The S&P 500 was down 1.59 points, or 0.06 percent, at 2,386.54 and the Nasdaq Composite was down 4.88 points, or 0.08 percent, 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.

First-quarter profits at S&P 500 companies are estimated to have increased 14.2 percent, its strongest growth since 2011, according to Thomson Reuters I/B/E/S.

“Strong earnings have been a continuing theme for a while even with the moderate economic growth, and we’re also seeing the global economy pick up, so that’s all adding to the positive mood,” said Brown.

Tesla was down 2.4 percent to $303.65 after the electric-car maker posted a bigger-than-expected loss.

Viacom fell 10 percent to $35.36 after the media company reported results.

CBS, which is scheduled to report results after the market close, was also down 3.5 percent at $61.25.

Insurers AIG, Metlife and Prudential were up about 2.5 percent after reporting a better-than-expected quarterly profit.

Declining issues outnumbered advancers on the NYSE by 1,557 to 1,091. On the Nasdaq, 1,260 issues rose and 1,079 fell.

The S&P 500 index showed 25 new 52-week highs and six new lows, while the Nasdaq recorded 58 new highs and 26 new lows. (Reporting by Tanya Agrawal; Editing by Savio D‘Souza)

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