Weak oil prices pull Wall Street away from record levels

By Yashaswini Swamynathan

REUTERS - U.S. stock indexes retreated from record levels as a drop in oil prices pressured energy stocks.

Oil prices fell 1.6 percent in choppy trading after the U.S. government reported a surprise crude stockpile build.

The S&P 500 energy index fell 0.9 percent. Exxon Mobil's 1.5 percent drop was the top drag on the S&P 500 and the Dow.

A rally since late June has left the S&P up nearly 7 percent in 2016, as expectations of continued low interest rates encourage investors to buy into equities. The benchmark index has hit four record intraday highs this month.

However, trading was low on Wednesday in the absence of market-moving information in a traditionally low-volume season.

"Low volume is fairly standard at this time of the year and August tends to be a very choppy month," said Quincy Krosby market strategist at Prudential Financial. "If you have low volumes, it could skew the market in any direction, and that's what you have today."

Trading volumes have been near year-lows since Monday as the second-quarter earnings season winds down.

The dollar index fell for the second straight day as weak U.S. productivity data on Tuesday somewhat dimmed the prospects of economic growth and would likely deter the Federal reserve from raising interest rates.

At 12:30 p.m. ET (1630 GMT), the Dow Jones Industrial Average was down 30.12 points, or 0.16 percent, at 18,502.93.

The S&P 500 was down 5.09 points, or 0.23 percent, at 2,176.65.

The Nasdaq Composite was down 20.54 points, or 0.39 percent, at 5,204.94.

Six of the 10 major S&P 500 indexes were lower.

Shares of Walt Disney rose 2.2 percent to $98.75, after the company reported results overnight and bought a 33 percent stake in video-streaming firm BAMTech. The stock provided the biggest boost to the S&P 500 and the Dow.

SunPower shares sank 30 percent after the company swung to a second-quarter loss, lowered its full-year revenue forecast and said it would reorganize its business.

Perrigo dropped 11 percent to $85.05 after the company reported a lower-than-expected profit and slashed its earnings forecast.

JD.com jumped 8.6 percent to $24.28 after the company reported revenue within its forecast. The stock gave the biggest boost to the Nasdaq.

Declining issues outnumbered advancing ones on the NYSE by 1,610 to 1,259. On the Nasdaq, 1,798 issues fell and 924 advanced.

The S&P 500 index showed 18 new 52-week highs and two new lows, while the Nasdaq recorded 61 new highs and 28 new lows.

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