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Energy companies lead US stocks lower as oil prices tumble

Energy companies are leading a slide on Wall Street as the price of U.S. crude oil tumbles to its lowest level in more than a year

Reported by: AP [ Published on: November 23, 2018 22:30 IST ]
Image Source : AP Energy companies lead US stocks lower as oil prices tumble

Energy companies led a slide on Wall Street Friday morning as the price of U.S. crude oil tumbled to its lowest level in more than a year. Traders are worried that a slowing global economy could hurt demand for oil. A slide in technology and internet stocks also weighed on the market. Retailers were mixed as investors monitored Black Friday for signs of a strong holiday shopping season.

KEEPING SCORE: The S&P 500 index fell 7 points, or 0.3 percent, to 2,642 as of 11:43 a.m. Eastern Time. The Dow Jones Industrial Average lost 84 points, or 0.4 percent, to 24,379. The Nasdaq composite dropped 4 points, or 0.1 percent, to 6,967. The Russell 2000 index of smaller-company stocks picked up 9 points, or 0.7 percent, to 1,498.

Trading volume could be light with the markets open for only a half day after the Thanksgiving holiday.

THE QUOTE: "Oil is really falling sharply, continuing its downward descent, and that appears to be giving investors a lot of concern that there's slowing global growth," said Jeff Kravetz, regional investment director at U.S. Bank Private Wealth Management. "You have that, and then you have the recent sell-off in tech and in retail, and then throw on there trade tensions and rising rates."

OIL SLUMP: Crude oil prices tumbled amid worries over rising production, record output from Saudi Arabia and mounting doubts that OPEC will cede to U.S. pressure and elect to cut production at the oil cartel's meeting next month.

The benchmark U.S. crude contract slid 6.3 percent to $51.21 per barrel in New York. That is the lowest in over a year. The contract gained $1.20 on Wednesday. Brent crude, the international standard, lost 5.9 percent to $58.94 per barrel in London. It lost 88 cents the day before.

Experts say the U.S. is increasing pressure on Saudi Arabia and OPEC to not cut production, as the Saudis had indicated they would, at their meeting on Dec. 6. U.S. President Donald Trump may have some leverage by not sanctioning Saudi Arabia over the death of a dissident writer. With oil supply already ample, that could push prices down further.

The slide in oil prices weighed on energy stocks. Marathon Oil dropped 3.8 percent to $15.80.

SHOCKER: Tesla fell 2.8 percent to $328.77 after the electric auto maker said it intends to cut prices for its Model X and Model S cars in China to make them more affordable.

BLACK FRIDAY: Traders had their eye on retailers as Black Friday, the traditional start to the crucial holiday shopping season, began. Shares in L Brands, operator of Victoria's Secret and Bath & Body Works, added 2.1 percent to $29.99. Other retailers put investors in a selling mood. Target fell 2.5 percent to $67.53, while Macy's dropped 2.1 percent to $31.90.

KEY ENDORSEMENT: Rockwell Collins climbed 9.5 percent to $141.95 after Chinese regulators conditionally approved the sale of the maker of communications and aviation electronics systems to United Technologies Corp.

BOND YIELDS: Bond prices were little changed. The yield on the 10-year Treasury note held at 3.04 percent.

CURRENCIES: The dollar fell to 112.85 yen from 113.06 yen late Wednesday. The euro weakened to $1.1335 from $1.1388. The pound strengthened to $1.2804 from $1.2788.

MARKETS OVERSEAS: Major indexes in Europe veered mostly higher as traders weighed the latest developments in Britain's desired exit from the European Union. Both sides were finalizing the terms of the divorce Friday and expected to sign off on the deal Sunday, though it's unclear whether the British parliament will pass the deal. Germany's DAX index added 0.4 percent, while France's CAC 40 gained 0.1 percent. The FTSE 100 index of leading British shares lost 0.2 percent.

Earlier in Asia, South Korea's Kospi shed 0.6 percent and Hong Kong's Hang Seng index dropped 0.4 percent. Australia's S&P/ASX 200 bucked the trend, gaining 0.4 percent. Shares fell in Taiwan and rose in Singapore, Thailand and Indonesia. Japanese markets were closed for a holiday.

Disclaimer: This is unedited, unformatted feed from the Associated Press (AP) wire.

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