Energy companies pull stocks lower as oil prices fall

U.S. stocks took small losses Wednesday as energy companies fell with the price of oil and chemical and materials companies traded lower. That pulled the market lower for August, ending a five-month winning streak for stocks. The losses were very small, though, as this proved to be one of stocks’ quietest months in recent history.

Stocks traded lower all day and fell for the fifth time in the last six days. The price of oil dropped more than 3% after the U.S. government said crude oil stockpiles grew more than expected last week, while gasoline stockpiles didn’t shrink as much as investors hoped.

The dollar gained some strength, which sent commodity prices lower, as expectations grew that the Federal Reserve could raise interest rates from their ultra-low levels as early as next month.

“The more the market believes a Fed rate hike is coming based on better economic data, the more the dollar rises,” said Quincy Krosby, market strategist at Prudential Financial. “Last Friday [Fed Chairwoman] Janet Yellen put the market on notice that she sees a rate hike in the coming months.”

The Dow Jones industrial average sank 53.42 points, or 0.3%, to 18,400.88. The Standard & Poor’s 500 index fell 5.17 points, or 0.2%, to 2,170.95. The Nasdaq composite slipped 9.77 points, or 0.2%, to 5,213.22.

Energy prices slumped after the U.S. government said crude oil stockpiles increased by 2.3 million barrels last week, a bigger gain than analysts expected. Gasoline stockpiles shrank, but not as much as investors had hoped.

U.S. crude dropped 3.6% to $44.70 a barrel. Brent crude, the benchmark for international oil prices, fell 2.7% to $47.04.

That helped send oil and gas companies lower. Chevron fell 1.1% to $100.58 and Exxon Mobil slipped 0.4% to $87.14. Schlumberger declined 2% to $79.

H&R Block shares dropped 10.5% to $21.66 after the tax preparer posted a bigger first-quarter loss and less revenue than analysts expected. The company, which reported weak results from tax season in the spring, said it is facing more competition in the tax prep industry as well as a growing number of independent tax preparers. Its stock is down 35% this year.

Brown-Forman slumped 3.5% to $48.55 after the maker of liquors, including Jack Daniel’s whiskey and Finlandia vodka, posted sales that fell short of estimates. Brown-Forman said its results were hurt by weak sales in emerging markets and the strong dollar, which makes U.S. goods more expensive overseas.

Materials companies took some of the biggest losses. Chemicals maker DuPont slid 0.9% to $69.60. Agribusiness giant Monsanto fell 0.9% to $106.50 and building materials company Martin Marietta Materials sank 3.1% to $183.03.

California companies making big moves included AeroVironment, which dived 17% to $24.74 after the Monrovia maker of unmanned aircraft took a larger loss than expected and reported weak sales.

Palo Alto Networks fell 7.2% to $133.17 after the Silicon Valley maker of security software gave a weak profit forecast for the current quarter.

Veeva Systems jumped 8.7% to $40.92 after the Pleasanton, Calif., company, which provides cloud-based software services for life sciences companies, raised its profit and sales estimates for the year.

The Standard & Poor’s 500 index set records in August, but it ended the month down 0.1%. The index also traded in one of the narrowest ranges of any month in its history as investors tried to get a feel for the Federal Reserve’s plans. The biggest losses went to phone and utilities companies, while concerns over drug pricing hurt healthcare stocks. Banks rose the most as investors gradually became more optimistic that interest rates will rise.

Bond prices slipped Wednesday, sending yields slightly higher. The yield on the 10-year Treasury note fell to 1.58% from 1.57%. The dollar rose to 103.44 yen from 102.97 yen. The euro rose to $1.1162 from $1.1139.

Wholesale gasoline fell 4 cents to $1.41 a gallon. Heating oil fell 6 cents to $1.41 a gallon. Natural gas rose 6 cents to $2.89 per 1,000 cubic feet.

Gold fell $5.10 to $1,311.40 an ounce. Silver rose 3 cents to $18.71 an ounce. Copper remained at $2.08 a pound.

In Brazil the Bovespa fell 1.7% after the country’s Senate voted to remove President Dilma Rousseff from office. The move was expected, but it was a major event in a political fight that has lasted a year and is far from over.

Germany’s DAX and Britain’s FTSE 100 each shed 0.6%. France’s CAC 40 fell 0.4%. Earlier, Japan’s benchmark Nikkei 225 rose 1% as investors were cheered by a stronger dollar, which helps Japanese exporters. South Korea’s Kospi lost 0.3% and Hong Kong’s Hang Seng was down 0.2%.

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UPDATES:

2:30 p.m.: This article was updated with closing prices and additional information.

This article was originally published at 7:05 a.m.