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Drop in energy stocks leads market lower
The latest downturn in crude oil prices put investors in a selling mood yesterday, pulling US stocks lower for the second time this week. The market decline, which wiped out some of the gains from a rally the day before, came on lighter-than-usual trading ahead of the New Year's Day holiday.
Energy companies fell the most among the ten sectors in the Standard & Poor's 500 index, 1.5 per cent. The sector is down 23.8 per cent for the year. Southwestern Energy fell 6.8 per cent, while Consol Energy sank 5.6 per cent.
The price of oil shed 3.4 per cent yesterday, extending its losses for the year to nearly 40 per cent. The Dow Jones industrial average fell 117.11 points, or 0.7 per cent, to 17,603.87. The S&P 500 index dropped 15 points, or 0.7 per cent, to 2,063.36. The Nasdaq composite lost 42.09 points, or 0.8 per cent, to 5,065.85.
The day's market action cut into the S&P 500's slim gain for the year. The index remains essentially flat with an increase of 0.2 percent this year. The Nasdaq is up about 7 per cent, while the Dow is on track to end 2015 with a loss of 1.2 per cent.
The major stock indexes headed lower from the get-go on Wednesday as investors tracked the latest swings in oil and natural gas prices.
Benchmark US crude fell US$1.27 to close at US$36.60 a barrel in New York. It’s down 39 per cent this year. Brent crude, which is used to price international oils, slid $1.33, or 3.5 percent, to close at $36.46 a barrel in London.
Several energy companies closed lower, including Noble Energy, which fell $1.18, or 3.5 per cent, to $32.22, and Southwestern Energy, which tumbled 46 cents, or 6.8 percent, to $6.30.
In other energy trading in New York, wholesale gasoline fell 5 cents, or 3.6 percent, to US$1.23 a gallon, while heating oil declined 5 cents, or 4.5 per cent, to US$1.079 a gallon. Natural gas slumped 15.6 cents to US$2.214 per 1,000 cubic feet.