The Jim Bakker Show

Oil prices slipped with rise in U.S. gasoline inventories

Oil and gas tankers are anchored off the Marseille harbour, southeastern France,

LONDON (Reuters) – Oil prices slipped on Thursday after a rise in U.S. gasoline inventories helped push U.S. oil stocks to a record high, reinforcing worries of a global oversupply.

U.S. crude and oil product stocks rose 2.62 million barrels in the week to July 15 to an all-time high of 2.08 billion barrels, the U.S. Energy Department said.

U.S. gasoline stocks rose 911,000 barrels in the week, against a forecast for unchanged, and were well above the upper limit of the average range, data from the U.S. Energy Information Administration showed.

Tamas Varga, oil analyst at London brokerage PVM Oil Associates, said the build in U.S. oil inventories reflected a very well supplied global market.

“There is lots of oil around,” said Varga. “Market strength is not sustainable.”

U.S. light sweet crude for September delivery the new front-month contract from Thursday, was down 20 cents at $45.55 a barrel by 1350 GMT. The August contract expired on Wednesday after rising 29 cents, or 0.7 percent, to settle at $44.94 a barrel.

Brent crude was down 15 cents at $47.02 a barrel.

U.S. crude oil stock fell for a ninth consecutive week last week, dropping 2.3 million barrels.

But at 519.5 million barrels, crude oil inventories are at historically high levels for this time of year, the EIA said.

ABN AMRO senior energy economist Hans van Cleef said investors were concerned by the global oversupply and high inventories:

“Near-term there are still some downside risks,” van Cleef said, forecasting Brent could slip around $5 lower towards $42 or $43 a barrel.

July is the peak of summer when Americans traditionally take to the road, driving up gasoline demand.

A glut of refined products has worsened an already-grim outlook for U.S. crude oil for the rest of the year and the first half of 2017, traders warned this week, as the spread between near-term and future delivery prices reached its widest in five months.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson)

U.S. jobless claims hit three month low

A sign advertising "Summer Jobs" hangs on a lamp post in Somerville, Massachusetts,

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting a three-month low as the labor market continues to gather momentum.

Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 253,000 for the week ended July 16, the lowest reading since April, the Labor Department said on Thursday. Claims for the prior week were unrevised.

Claims are near the 43-year low of 248,000 touched in mid-April. Economists polled by Reuters had forecast initial claims rising to 265,000 in the latest week.

Claims have now been below 300,000, a threshold associated with a healthy labor market, for 72 straight weeks, the longest stretch since 1973. Claims tend to be volatile around this time of the year when automobile manufacturers normally idle assembly lines for retooling. Some, however, often keep production running, which can throw off the model the government uses to strip out seasonal fluctuations from the data.

A Labor Department analyst said there were no special factors influencing last week’s claims data and no states had been estimated. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,250 to 257,750 last week.

U.S. financial markets were little moved by the data, with investors’ attention focused on a speech by European Central Bank president Mario Draghi.

The claims data covered the survey week for July’s nonfarm payrolls. The four-week average of claims fell 9,000 between the June and July periods, suggesting another month of strong job gains. The economy added a whopping 287,000 jobs in June, the largest this year.

Labor market strength, characterized by the very low layoffs and solid pace of hiring, is boosting consumer spending, which in turn is providing a lift to economic growth.

According to a Reuters survey of economists, the government is expected to report next week that the economy grew at a 2.6 percent annualized rate in the second quarter, an acceleration from the 1.1 percent pace logged in the first three months of the year.

Although a separate report on Thursday showed factory activity in the mid-Atlantic region contracted this month, a surge in new orders and shipments suggested the worst of the manufacturing downturn was probably over.

The Philadelphia Federal Reserve said its business index fell to a reading of -2.9 this month from 4.7 in June.

Twenty-two percent of the firms, which participated in the survey, reported an increase in activity – three points lower than in June. Fifty-one percent of firms reported steady activity this month, little changed from June.

The new orders sub-index rose to 11.8 this month from -3.0 in June, with shipments rebounding to 6.3 from -2.1 in June.

Manufacturing has been hurt by a strong dollar and sluggish global demand, which have undercut U.S. exports, as well as efforts by businesses to reduce an inventory overhang. Lower oil prices have also weighed on manufacturing as energy firms cut back on capital spending in response to reduced profits.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

As exports struggle, Israel’s economy faces slower growth

By Steven Scheer

JERUSALEM (Reuters) – For decades, Israel’s high growth was driven by exports of oranges, diamonds, pharmaceuticals and software, but the picture is changing due to weak global demand and a strong shekel.

Consumer spending is now a critical growth driver. Businesses fear factories and jobs are at risk if exports, which have declined 10 percentage points over the past decade, fall further.

“We are exporting 80 percent less than our peak” a decade ago, said Joseph Ben-Dor, chief executive of Ben-Dor Fruits & Nurseries on the Jordan River in northern Israel.

Ben-Dor, whose family started the business in 1888, said his main market is Europe, particularly Britain where his largest customers for plums and other fruits are Tesco, Marks & Spencer, Morrisons and Waitrose. He largely blames a strong shekel, rising water, labor and other costs, and government obstacles for lower sales abroad.

Diamond exports, 25-30 percent of Israel’s industrial exports, have slid 30 percent in the past few years, mainly on slower global demand, said Yoram Dvash, president of the Israel Diamond Exchange. Exports to China, a key market, have plunged 70 percent in the last 18 months.

Citing weak global growth that has hurt exports, Israel’s Finance Ministry on Wednesday lowered its economic growth forecast for 2016 to 2.5 percent from 2.8 percent and trimmed estimates through 2019.

The Bank of Israel last month cut its growth estimate from 2.8 percent to 2.4 percent for 2016 and 2.9 percent in 2017.

When exports are hot, Israel’s economy tends to grow between 4 and 5 percent a year. With flat or declining exports in 2014, 2015 and probably again this year, growth is closer to 2.5 percent, well below the average of 4.5 percent from 2004-2011.

“If the trend continues we can witness sustained private consumption growth but we will shift to a lower growth rate,” Nathan Sussman, head of research at the Bank of Israel, said. “Growth will likely be in the 2.5 to 3 percent range if it stays this way.”

With the population growing 2 percent a year, that amounts to per capita growth of just 0.5-1 percent.

NO MAGIC PILL

Ten years ago, net exports accounted for 41 percent of output. Now the ratio is 31 percent. While that tops the 13 percent in the United States and 27 percent for Europe, the decline has strained the economy.

“We need to target growth of 4 to 5 percent so if you want to reach that, you need to turn on the engine of exports,” said Shraga Brosh, president of Israel’s Manufacturers’ Association.

Brosh said the government needed to invest more in research and development and encourage small- and medium-sized factories to become more efficient through tax incentives.

Ohad Cohen, head of the Foreign Trade Administration in the Economy Ministry, said there was only so much the government could do. “We don’t have any magic pill,” he said.

Still, the ministry supports exporters with insurance guarantees and in opening new markets. In recent years, it has doubled the number of offices in Asia to 16. Asia now accounts for 22 percent of Israel’s exports, compared with 31 percent for Europe and 25 percent for the United States.

Israel plans to invest in penetrating markets in Africa and Latin America, Cohen said.

Exports excluding diamonds and start-ups are forecast to fall 1.5 percent this year after a similar decline in 2015. Much of the weakness has come from Europe, in part because the euro has lost 15 percent against the shekel since late 2014.

Another issue is that three companies – Intel, Israel Chemicals (ICL) and Teva Pharmaceutical Industries – control nearly half of industrial exports. For various reasons they have trimmed output.

Intel is shifting production to a new chip plant in Israel, while falling demand and prices for potash have weighed on ICL. Teva said its exports are “characterized with monthly and seasonal fluctuations” but are not falling on an annual basis.

Concerned by sluggish exports, the central bank continues to buy dollars to try to prevent further shekel strength. It has bought about $70 billion of foreign currency since 2008, but the shekel has not weakened enough to spur an export recovery.

(Editing by Janet Lawrence)

Turkey set for emergency measures to quell post-coup turmoil

By Humeyra Pamuk and Nick Tattersall

ISTANBUL (Reuters) – Turkey will announce emergency measures on Wednesday to try to shore up stability and prevent damage to the economy as it purges thousands of members of the security forces, judiciary, civil service and academia after an abortive coup.

Around 50,000 soldiers, police, judges, civil servants and teachers have been suspended or detained since the military coup attempt, raising tensions across the country of 80 million which borders Syria’s chaos and is a Western ally against Islamic State.

Academics were banned from traveling abroad on Wednesday in what a Turkish official said was a temporary measure to prevent the risk of alleged coup plotters in universities from fleeing. State TRT television said 95 academics had been removed from their posts at Istanbul University alone.

“Universities have always been crucial for military juntas in Turkey and certain individuals are believed to be in contact with cells within the military,” the official said.

President Tayyip Erdogan blames the network of U.S.-based cleric Fethullah Gulen for Friday night’s attempted coup, in which more than 230 people were killed as soldiers commandeered fighters jets, military helicopters and tanks to try to overthrow the government.

Erdogan has vowed to clean the “virus” responsible for the plot from all state institutions. The depth and scale of the purges have raised concern among Western allies that Erdogan is trying to suppress all dissent, and that opponents unconnected with the plot will be caught in the net.

He will chair meetings in his palace on Wednesday of the cabinet and the National Security Council, after which a series of emergency measures are expected to be announced.

In a sign of how shaken Turkey’s leadership has been by the coup attempt, with dozens of generals arrested as well as Erdogan’s aide de camp, government ministers and top officials have not been briefed in advance of the meetings.

“The cabinet meeting is classified at the highest level for national security reasons. The palace will give ministers a dossier just beforehand,” one senior official told Reuters.

“Ministers do not yet know what is going to be discussed.”

Around a third of Turkey’s roughly 360 serving generals have been detained since the coup bid, a second senior official said, with 99 charged pending trial and 14 more being held.

The threat of prolonged instability in a NATO member country, which had not seen a violent military coup for more than three decades, has shaken investors’ confidence.

The lira hit a 10-month low in early trade on Wednesday, touching 3.063 to the dollar. The Istanbul stock index is down 8 percent so far this week, its worst three-day performance since 2013. The cost of insuring Turkish debt against default rose to its highest in nearly a month, according to data from Markit.

Deputy Prime Minister Mehmet Simsek told Reuters a priority in the measures to be discussed on Wednesday would be preventing damage to the economy. He also said on Twitter they would be “market-friendly” and would prioritize structural reform.

MILITARY CHIEF REFUSED TO BACK COUP BID

Around 1,400 people were wounded as soldiers commandeered tanks, attack helicopters and warplanes, strafing parliament and the intelligence headquarters and trying to seize the main airport and bridges in Istanbul.

At the height of the abortive coup, the rebel pilots of two F-16 fighter jets had Erdogan’s plane in their sights as he returned to Istanbul from a holiday on the coast. Erdogan said he was almost killed or captured by the mutineers.

In testimony published by the Hurriyet newspaper and corroborated by a Turkish official, an infantry lieutenant-colonel said the coup plotters had tried to persuade military chief Hulusi Akar, who was being held hostage, to join the effort to overthrow Erdogan but that he had refused.

“When he refused, they couldn’t convince the senior commanders either. Akar’s refusal to be a part of this paved the way for the failure of the coup attempt,” the written transcript published by the newspaper said.

Erdogan, Prime Minister Binali Yildirim, ministers, senior commanders and generals had been due to be taken one by one during the night of the coup bid, the testimony said.

Turkey’s Western allies have expressed solidarity with the government over the coup attempt but have also voiced increasing alarm at the scale and swiftness of the response, urging it to adhere to democratic values.

On Tuesday, authorities shut down media outlets deemed to be supportive of Gulen and said 15,000 people had been suspended from the education ministry along with 100 intelligence officials. A further 492 people were removed from duty at the Religious Affairs Directorate, 257 at the prime minister’s office and 300 at the energy ministry.

Those moves come after the detention of more than 6,000 members of the armed forces, from foot soldiers to commanders, and the suspension of close to 3,000 judges and prosecutors. About 8,000 police officers, including in the capital Ankara and the biggest city Istanbul, have also been removed.

U.N. High Commissioner for Human Rights, Zeid Ra’ad Al Hussein, voiced “serious alarm” on Tuesday at the mass suspension of judges and prosecutors and urged Turkey to allow independent monitors to visit those who have been detained.

The foreign ministry has said criticism of the government’s response amounts to backing the coup.

TENSIONS WITH U.S.

Erdogan’s spokesman said on Tuesday the government was preparing a formal request to the United States for the extradition of Gulen. U.S. President Barack Obama discussed the status of Gulen in a telephone call with Erdogan on Tuesday, the White House said, urging Ankara to show restraint as it pursues those responsible for the coup attempt.

Seventy-five-year-old Gulen, who lives in self-imposed exile in Pennsylvania but has a network of supporters within Turkey, has condemned the abortive coup and denied any role in it.

A former ally-turned critic of Erdogan, he suggested the president staged it as an excuse for a crackdown after a steady accumulation of control during 14 years in power.

Prime Minister Yildirim accused Washington, which has said it will consider Gulen’s extradition only if clear evidence is provided, of double standards in its fight against terrorism.

Yildirim said the justice ministry had sent a dossier to U.S. authorities on Gulen, whose religious movement blends conservative Islamic values with a pro-Western outlook and who has a network of supporters within Turkey.

White House spokesman Josh Earnest confirmed Ankara had filed materials in electronic form with the U.S. government, which officials were reviewing. Any extradition request from Turkey, once submitted, would be evaluated under the terms of a treaty between the two countries, he added.

Such a request would face legal and political hurdles in the United States. Even if approved by a judge, it would still have to go to Secretary of State John Kerry, who can consider non-legal factors, such as humanitarian arguments.

“I urge the U.S. government to reject any effort to abuse the extradition process to carry out political vendettas,” Gulen said on Tuesday in a statement issued by the Alliance for Shared Values, a group associated with the cleric.

(Additional reporting by Orhan Coskun, Humeyra Pamuk, Can Sezer and David Dolan; Writing by Nick Tattersall and Philippa Fletcher; Editing by David Stamp)

U.S. jobless claims hover at lower levels

Job seekers fill out applications during 11th annual Skid Row Career Fair the Los Angeles Mission in Los Angeles

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits unexpectedly held at lower levels last week, pointing to further momentum in the labor market after job growth surged in June.

Another report on Thursday showed producer prices recorded their biggest gain in a year in June on rising costs for energy products and services. The data signaled economic strength that could allow the Federal Reserve to raise interest rates later this year.

Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 254,000 for the week ended July 9, the Labor Department said. Claims are near the 43-year low of 248,000 touched in mid-April.

Economists polled by Reuters had forecast initial claims rising to 265,000 in the latest week. Claims have now been below 300,000, a threshold associated with a healthy labor market, for 71 consecutive weeks, the longest stretch since 1973.

The labor market is on a strong footing, with nonfarm payrolls having increased by a robust 287,000 jobs in June, which should underpin economic growth for the rest of the year.

Prices for U.S. Treasuries fell slightly and the dollar pared losses against a basket of currencies after Thursday’s data. U.S. stock futures were trading higher.

In a second report, the Labor Department said its producer price index for final demand rose 0.5 percent last month, the largest increase since May 2015, after advancing 0.4 percent in May.

In the 12 months through June, the PPI increased 0.3 percent, rising for the first time since December 2014, after slipping 0.1 percent in May.

Producer inflation is being boosted by the fading drag from a strong dollar and lower oil prices.

The dollar’s surge between June 2014 and December 2015 put downward pressure on producer prices, helping to keep inflation below the Fed’s 2 percent target.

The greenback’s rally appears to be over. The currency has slipped on a trade-weighted basis this year while oil prices have rebounded from multi-year lows.

Last month, energy prices jumped 4.1 percent after increasing 2.8 percent in May. Prices for services rose 0.4 percent after gaining 0.2 percent in May. Services were boosted by a surge in costs related to securities brokerage and dealing.

Healthcare costs were unchanged as a 0.1 percent rise in doctor visits was offset by weak home healthcare services.

A key measure of underlying producer price pressures that excludes food, energy and trade services rose 0.3 percent last month after edging down 0.1 percent in May. The so-called core PPI was up 0.9 percent in the 12 months through June. The core PPI increased 0.8 percent in May.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

S&P 500, Dow Jones at Record Highs

raders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 12, 2016

(Reuters) – The S&P 500 and the Dow set new all-time highs at the open on Wednesday as investor optimism rose amid signs of a steadying global economy.

The Dow Jones Industrial Average rose 37.46 points, or 0.2 percent, to 18,385.13. It hit a record of 18,390.16.

The S&P 500 gained 3.81 points, or 0.18 percent, to 2,155.95. It hit a record of 2,156.45.

The Nasdaq Composite added 9.77 points, or 0.19 percent, to 5,032.59.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)

Citibank to close Venezuela government accounts: Maduro

CARACAS (Reuters) – Venezuela’s President Nicolas Maduro said on Monday that Citibank NA <C.UL>, planned to shut his government’s foreign currency accounts within a month, denouncing the move by one of its main foreign financial intermediaries as part of a “blockade.”

“With no warning, Citibank says that in 30 days it will close the Central Bank and the Bank of Venezuela’s accounts,” Maduro said in a speech, adding that the government used the U.S. bank for transactions in the United States and globally.

“Do you think they’re going to stop us with a financial blockade? No, gentlemen. Noone stops Venezuela.”

Citibank, a unit of Citigroup Inc <C.N>, could not immediately be reached for comment about the purported measure against Venezuela’s monetary authority and the Bank of Venezuela which is the biggest state retail bank.

With the OPEC nation’s economy immersed in crisis, various foreign companies have been pulling out or reducing operations.

Critics say the socialist economics of Maduro and his predecessor Hugo Chavez have been a disaster for Venezuela, while the government blames its political foes and local businessmen for waging an “economic war” against it.

Due to strict currency controls in place since 2003, the government relies on Citibank for foreign currency transactions.

(Reporting by Diego Ore; Writing by Andrew Cawthorne; Editing by Andrew Hay)

Global stocks outlook dims with risk aversion on the rise again: Reuters poll

By Ross Finley and Rahul Karunakar

LONDON/BENGALURU (Reuters) – Optimism about stock market performance this year has wilted, with investors fretting about the global economy and unexpected shocks likely to condemn most key indices to a weaker performance than thought just a few months ago.

The latest Reuters poll of over 250 analysts, fund managers and brokers worldwide taken June 27-July 11 also showed an intensifying pull between stretched share prices – with Wall Street at a record high – and bond markets, with most government bond yields at record lows and vast swathes of them negative.

Strategists at Citi have noted that the gap between the global government bond benchmark yield, just 0.5 percent, and the dividend yield on global equities of about 2.7 percent, is the widest in 60 years, and on that basis, stocks look attractive.

Ten of the indexes polled are expected to be lower by the end of the year when just three months ago the consensus view among forecasters was that they would be up, in some cases significantly. [Graphic: http://tmsnrt.rs/29t4c95]

But the poll results do not provide a definitive picture on where forecasters are recommending investors put their money, although hopes remain high once again that next year will be better, particularly for struggling emerging markets.

The Bank of England is set to reverse course in response to Britain’s shock vote on June 23 to leave the European Union, with rate cuts and renewed government bond purchases nearly certain in an attempt to limit the damage. [BOE/INT]

The trouble is, even though the vast majority polled don’t expect any financial crisis from Brexit, that shock has increased risk aversion, as well as the risk a likely British recession may have ripple effects well beyond its borders.

Expectations for an interest rate rise in the United States have also faded despite a surprisingly strong jobs report last week, triggering a rally in stocks and U.S. Treasuries.

So while in past years the prospect of more central bank cash might have lit a fire under the stock market, there is a clear sense now of pessimism in the latest results about the outlook for European shares, as well as Britain’s FTSE 100. [EPOLL/FRDE] [EPOLL/GB]

“The Brexit vote has damaged the outlook for the global economy and EPS (earnings per share). This is clearly unhelpful for global equities. It also drove global bond yields down to unprecedented levels, which has increased the relative income attractions of equities,” wrote Citi strategists in a note.

“These two opposing forces are likely to keep share prices trapped in the current trading range. While Citi strategists collectively forecast a 7 percent rise in global equities by mid-2017, investors could probably generate a better return if they wait for the next dip.”

Even on Wall Street, where stocks had their worst start to the year ever only to rally back to a record high, in large part on optimism about the economy, many are now cautious, especially ahead of a presidential election in November. [EPOLL/US]

“It’s Brexit one day, election issues the next. We’ve been telling clients to sort of buckle up,” said Jeff Mortimer, director of investment strategy for BNY Mellon Wealth Management.

However, with increasing central bank ownership of a government bond market limited in size by fiscal restraint, stock and bond prices are likely to continue rising, simply because the money that’s been created has to go somewhere.

The European Central Bank also has both feet on the accelerator, having launched its latest aggressive expansion to its stimulus well before the Brexit vote. Now many are speculating it may have to consider doing even more to make sure the euro zone economy doesn’t veer off track as a result.

Perhaps unexpectedly, the most optimistic outlook appears to be for Japan, where stocks have been beaten down by a soaring yen and a moribund economy. [EPOLL/JP]

In addition to a much lengthier and more aggressive central bank stimulus program than in Europe, more fiscal stimulus is in the pipeline there after elections at the weekend where Prime Minister Shinzo Abe was victorious.

Indian shares are also expected to perform well on relative stability compared with other Asian economies, although forecasts are markedly less optimistic for the remainder of the year than those taken three months ago. [EPOLL/IN]

For Asia more widely, as well as Latin America, forecasters were less upbeat, looking past the U.S. presidential election and potential near-term trouble as a result of Brexit to peg 2017 for a rebound. [EPOLL/ASIA] [EPOLL/BR]

“There are likely to be more periodic sell-offs in risky assets in the months ahead, but we do not expect these to prevent EM (emerging market) stocks from performing reasonably well,” wrote David Rees, senior markets economist at Capital Economics.

“If anything, the vote for ‘Brexit’ appears likely to ensure that global monetary conditions remain looser for longer,” he wrote. “This, along with relatively low valuations, will support EM equities in the next 18 months.”

(Poll data: <EQUITYPOLL1>)

(Other stories from the Reuters global stock markets poll:)

(Additional reporting and polling from reporters in Seoul, Shanghai, Sydney, Tokyo, London, Frankfurt, Milan, Moscow, Johannesburg, New York, Brasilia, Sao Paulo, Toronto and Bengaluru; Editing by Adrian Croft)

Wall St. declines as growth worries, oil weigh

By Marcus E. Howard

(Reuters) – Wall Street stocks fell in afternoon trading on Tuesday as investors faced continued uncertainty in Europe and tumbling oil prices weighed on energy shares.

The Bank of England said the outlook for Britain’s financial stability after its June 23 vote to leave the European Union, dubbed Brexit, was “challenging” and said it would lower the amount of capital that banks were required to hold in reserve in order to allow them to keep lending.

“After a surprisingly big bounce last week, I think we’re in a little bit of a risk-off trading today – the uncomfortable feeling that maybe all is not fully well given Brexit,” said Jeffrey Carbone, senior partner, Cornerstone Financial Partners, in Cornelius, North Carolina.

Seven of the 10 major S&P sectors were lower. The energy sector <.SPNY> fell 2.4 percent. The materials index <.SPLRCM> was down 2 percent.

The financial sector <.SPSY> was down 1.9 percent with JPMorgan <JPM.N>, Wells Fargo <WFC.N> and Citigroup <C.N> falling between 2.4 and 3.8 percent.

Oil prices <LCOc1> <CLc1> also slipped more than $2 per barrel as a potential economic slowdown weighed on prospects for demand.

Tepid U.S. data added to overall growth worries. Data showed new orders for U.S. factory goods fell in May on weak demand for transportation and defense capital goods.

New orders for manufactured goods declined 1.0 percent after two straight months of increases, according to the U.S. Commerce Department.

At 2:20 p.m. (1820 GMT), the Dow Jones industrial average <.DJI> was down 130.39 points, or 0.73 percent, to 17,818.98, the S&P 500 <.SPX> had lost 17.28 points, or 0.82 percent, to 2,085.67 and the Nasdaq Composite <.IXIC> had dropped 50.52 points, or 1.04 percent, to 4,812.04.

Investors have been seeking safe-haven assets in an uncertain economic environment. Weak data from China added to the nervousness stemming from Britain’s vote to leave the EU.

Data from China showed services sector activity hit an 11-month high in June but a composite measure of activity including manufacturing fell to its lowest in four months.

Tesla’s <TSLA.O> shares fell 1.8 percent to $212.67 after the electric car maker missed vehicle delivery targets for the second consecutive quarter.

Netflix <NFLX.O> rose 0.8 percent to $97.45 after it reached an agreement with Comcast <CMCSA.O> for its services to be available on the cable company’s set-top box. Comcast was down 1 percent at $64.60.

Declining issues outnumbered advancers on the NYSE by 2,267 to 742, for a 3.06-to-1 ratio on the downside; on the Nasdaq, 2,075 issues fell and 717 advanced for a 2.89-to-1 ratio favoring decliners.

The S&P 500 posted 66 new 52-week highs and one new low; the Nasdaq recorded 61 new highs and 29 new lows.

(Additional reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Don Sebastian and James Dalgleish)

Wall Street set to snap four day rally as worries seep in

A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 1, 2016

By Yashaswini Swamynathan

(Reuters) – Wall Street was set to open lower for the first time in five days as investors sought shelter in safe-haven assets amid a drop in oil prices and global growth worries.

U.S. government bond yields were at an all-time low as weak data from China added fuel to the uncertainty stemming from Britain’s vote to leave the European Union.

Oil prices fell nearly 3 percent as a potential economic slowdown weighed on prospects of demand.

Shares of oil and gas companies including Exxon, Marathon Oil and Freeport fell in premarket trading on Tuesday.

Data from China showed that the country’s services sector activity rose to an 11-month high in June, but a composite measure of activity including manufacturing fell to its lowest in four months.

“We have some profit-taking from last week’s rally, but it won’t be anything substantial. As long as yields crumble, they will act as a cushion for the stock market,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

The S&amp and the Dow clocked their highest weekly gains for the year last week, recovering from a two-day selloff that robbed global markets off $3 trillion.

The Bank of England said the outlook for UK’s financial stability post-Brexit was “challenging” and said it would lower the amount of capital that banks were required to hold in reserve in order to allow them to keep lending.

Dow e-minis were down 109 points, or 0.61 percent at 8:13 a.m. ET.

S&amp 500 e-minis were down 14.25 points, or 0.68 percent, with 361,295 contracts traded.

Nasdaq 100 e-minis were down 29.75 points, or 0.67 percent, on volume of 39,784 contracts.

Wall Street closed down higher on Friday as investor sentiment was buoyed by strong manufacturing data.

The Commerce Department will release a report on Tuesday that is expected to show that new orders for manufacturing goods fell by 1 percent in May, compared to 1.9 percent in April. The data is expected at 10:00 a.m. ET.

While traders do not expect the U.S. Federal Reserve Bank to raise interest rates this year, they will keenly watch policymakers’ comments on what the Fed’s next step would be.

New York Fed President William Dudley is scheduled to participate in a discussion in Binghamton, New York at 2:30 p.m. ET (1830 GMT).

The Fed’s next policy meeting is on July 26-27.

Tesla’s shares fell 4.3 percent to $207.45 after the electric car maker missed vehicle deliveries target for the second consecutive quarter.

Diagnostic test maker Illumina fell 3.3 percent to $136.07 after Morgan Stanley cut its rating to “underweight”. The stock was the biggest percentage loser among S&amp components.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)

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