US STOCKS-Energy weighs on Dow, S&P 500; tech lifts Nasdaq

* Fed officials more divided on inflation outlook -minutes

* Oil slumps more than 3 pct on rising OPEC exports

* O’Reilly’s weak sales drag down auto parts retailers

* Dow down 0.02 pct, S&P 500 up 0.18 pct, Nasdaq up 0.75 pct
(Updates to mid-afternoon, changes byline)

By Chuck Mikolajczak

July 5 (Reuters) – A sharp drop in oil prices dragged the
energy sector lower and kept the Dow and S&P 500 near the
unchanged mark on Wednesday, while gains in technology stocks
lifted the Nasdaq.

Crude prices fell more than 3 percent, ending their longest
bull run in more than five years, hurt by a stronger dollar and
concerns about rising OPEC exports.

“Energy I have a real hard time getting excited about,” said
Robert Phipps, director at Per Stirling Capital Management in
Austin, Texas.

“The technology has come along where the cost of production
just keeps coming down and down.”

Shares of Exxon and Chevron fell by more
than 1 percent and were among the biggest drags on the Dow and
S&P. The S&P energy index lost 2.1 percent and was the worst
performing out of the 11 major S&P sectors.

A recent set of tepid economic data and an inflation rate
below the U.S. central bank’s 2 percent target may have a
bearing on the Federal Reserve’s plans for interest rate hikes.

New orders for U.S.-made goods fell more than expected in
May, data showed on Wednesday, but capital equipment orders were
slightly stronger than previously reported, suggesting the
manufacturing sector remained on a path of moderate growth.

Fed policymakers were increasingly split on the outlook for
inflation and how it will affect the future pace of rate
increases, according to minutes of the Fed’s latest policy
meeting on June 13-14.

“We’ve gotten a little bit of weaker economic data of late
and we seem to have deflation starting to set in. That does call
into question whether or not we are going to see as aggressive a
Fed as they are telling us to expect,” said Phipps.

The Dow Jones Industrial Average fell 4.7 points, or
0.02 percent, to 21,474.57, the S&P 500 gained 4.32
points, or 0.18 percent, to 2,433.33 and the Nasdaq Composite
added 45.95 points, or 0.75 percent, to 6,156.01.

The tech sector’s 1.11 percent rise led the S&P
500 gainers, with Advanced Micro Devices, Micron
and Nvidia among the best performers in the sector. The
PHLX semiconductor index jumped 2.02 percent

Technology shares have been volatile in recent weeks as the
sector’s strong run this year raised concerns about their
valuation.

The tech sector index is up more than 16 percent this year.

O’Reilly Automotive plunged and was last down 18.81
percent to a near three-year low after its second-quarter
same-store sales widely missed its own estimates.

That move dragged down other auto-parts retailers, with
Autozone down 9.07 percent and Advance Auto Parts
down 11.62 percent.

Declining issues outnumbered advancing ones on the NYSE by a
1.74-to-1 ratio; on Nasdaq, a 1.31-to-1 ratio favored decliners.
(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil
D’Silva and Meredith Mazzilli)


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