S&P 500 dips as oil prices fan inflation fear, Oracle slumps on weak forecast By AKUURA

© AKUURA. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. AKUURA/Carlo Allegri/File Photo

By Noel Randewich and Ankika Biswas

(AKUURA) – The and Nasdaq fell on Tuesday as a jump in oil prices deepened worries about persistent price pressures ahead of crucial inflation readings this week, while Oracle (NYSE:) slumped after its downbeat forecast and results.

Oil prices jumped more than 1%, building on a recent rally and stoking worries that sticky inflation could mean U.S. interest rates stay higher longer in the aftermath of strong economic data.

“People are a little bit worried about energy prices picking up pretty aggressively in recent weeks and that creates some concerns as we look forward to November” when some investors worry Federal Reserve policy makers may raise rates again, said Thomas Hayes, chairman at Great Hill Capital LLC.

Investors are awaiting August consumer price index data due on Wednesday and producer prices reading scheduled for Thursday to gauge the outlook for U.S. interest rates ahead of the Fed’s meeting on Sept. 20.

Interest rate traders see a 93% chance of rates remaining at the current levels in September but just a 56% likelihood of a pause at the November meeting, according to the CME FedWatch Tool.

“All the all the inputs that we get between now and the November meeting will be important, especially those related to inflation. So that thrusts a lot of importance on tomorrow’s CPI report,” said Art Hogan, chief market strategist at B Riley Wealth.

Investors will also monitor the European Central Bank’s policy decision on Thursday, when it is seen holding rates after nine consecutive hikes.

Cloud-services provider Oracle dropped 14% to its lowest intra-day level in three months, after forecasting current-quarter revenue below targets and narrowly missing first-quarter expectations.

Cloud-computing heavyweights Amazon.com (NASDAQ:) and Microsoft (NASDAQ:) fell by about 1%, pressured by Oracle’s weak forecast and by a rise in U.S. Treasury yields.

While higher oil prices fanned inflation fears, they lifted energy stocks by 1.3% to lead gains among major S&P 500 sector indexes. [O/R]

Apple (NASDAQ:) was down 1.4%, hurt by a report that China’s Huawei Technologies has raised the second-half shipment target for its Mate 60 series smartphone by 20%.

Also, Apple unveiled a new iPhone on Tuesday amid uncertainty about market access in China and intensifying competition.

The S&P 500 was down 0.25% at 4,476.45 points.

The Nasdaq declined 0.64% to 13,828.41 points, while the was up 0.30% at 34,767.56 points.

The most traded stock in the S&P 500 was Tesla (NASDAQ:) Inc, with $28.3 billion worth of shares exchanged during the session. The electric car maker’s shares declined 1.67%.

WestRock (NYSE:) jumped 3.7% on agreeing to merge with Europe’s Smurfit Kappa to create the world’s largest listed paper and packaging company, worth nearly $20 billion.

Advance Auto Parts (NYSE:) lost 5.7% after S&P Global downgraded the auto parts retailer’s credit and debt ratings from investment grade (BBB-) to junk (BB+).

Zions Bancorp jumped 7.5% after the U.S. regional lender posted a slight increase in its monthly net interest income growth.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.2-to-one ratio.

The S&P 500 posted 12 new highs and 14 new lows; the Nasdaq recorded 43 new highs and 161 new lows.