Wall Street slides overnight as investors await Yellen testimony

Specialist Michael Pistillo, left, and trader Tommy Kalikas work on the floor of the New York Stock Exchange. File photo / AP

Wall Street moved lower from record highs as investors awaited US Federal Reserve Chair Janet Yellen's testimony to Congress, while a decline in oil prices also weighed on equities.

In afternoon trading on Wall Street, the Dow Jones Industrial Average slid 0.30 per cent, while the Standard & Poor's 500 Index fell 0.23 per cent, and the Nasdaq Composite Index slipped 0.08 per cent.

"Yellen meets with Congress this week and there'll be some Fed-watchers looking for direction - whether they're going to raise rates this summer or not," Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co, told Bloomberg.

Declines in shares of Travelers and those of Chevron, last down 1 per cent and 0.8 per cent respectively, led the Dow lower. Bucking the trend were shares of UnitedHealth, last up 3.2 per cent.

Chevron fell with the price of oil. Benchmark Brent crude dropped US$1 at US$59.22, US West Texas Intermediate crude April futures fell 90 cents at US$49.44 a barrel.

"There is the notion that a bottom has been set at US$55 for Brent and US$45 for WTI, and there are enough buyers out there each time the market tests those levels,"John Kilduff, partner at New York energy hedge fund Again Capital, told Reuters.

A report showed sales of previously owned US homes dropped more than expected in January amid a shortage of supply. The National Association of Realtors said existing home sales fell 4.9 per cent to an annual rate of 4.82 million units, the lowest level since last April.

"January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows," Lawrence Yun, NAR chief economist, said in a statement. "Realtors are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions."

To be sure, some said the ongoing weakness in the recovery of the US real estate market might not be a bad thing.

"(Housing data) is hard to forecast in the context of Yellen talking tomorrow as well, because we may be in another one of these periods where weakness is a good thing before it forestalls the Fed a little bit longer," Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois, told Reuters.

In Europe, the Stoxx 600 Index ended day with a 0.7 per cent gain from the previous close, as did Germany's DAX and France's CAC 40 Index, following Friday's deal between Greece and its international lenders to extend its bailout program. The FTSE 100 Index slipped 0.04 per cent amid disappointing earnings from HSBC. The Greek market was closed for a holiday on Monday.

"Greece will still be an issue for the market for some time, but the market becomes desensitised to it," Kevin Lilley, head of European equities at Old Mutual Global Investors UK in London, told Bloomberg. "It looks like we're not going to have the worst-case scenario. In this environment, people can focus on the underlying companies and the improvement in the underlying economy."

In Germany, a report showed business confidence improved for a fourth month. The Ifo institute's business climate index rose to 106.8 in February, up from 106.7 in January.