Wall Street slides with Exxon, oil; Chipo­tle dips af­ter close

The Pak Banker - - MARKETS/SPORTS -

US stocks dropped af­ter an­other steep fall in oil prices and a dis­ap­point­ing spend­ing fore­cast from Exxon Mo­bil. Shares of Exxon fell 2.2 per­cent to $74.59 af­ter the oil ma­jor re­ported its small­est quar­terly profit in more than a decade, fore­cast a 25-per­cent drop in cap­i­tal spend­ing from 2015 lev­els and sus­pended share re­pur­chases.

With Exxon, "not only did the earn­ings dis­ap­point peo­ple, but the fact that they slashed capex so much and they (sus­pended) their share re­pur­chase pro­gram. It's a good in­di­ca­tion that one more large oil com­pany is not see­ing an im­prove­ment in the en­vi­ron­ment," said Michael O'Rourke, chief mar­ket strate­gist at JonesTrad­ing in Green­wich, Con­necti­cut. Data so far this earn­ings pe­riod shows the cap­i­tal spend­ing slump that orig­i­nated in the hard-hit en­ergy sec­tor was spread­ing more widely across other U.S. in­dus­tries.

Ear­lier Tues­day, BP Plc (BP.N) re­ported an an­nual loss of $6.5 bil­lion, its largest ever.

The S&P en­ergy in­dex .SPNY slid 3.3 per­cent, the big­gest drag on the S&P 500. Oil prices CLc1 LCOc1 slid sharply as hopes faded for a deal be­tween OPEC and Rus­sia to cut out­put. The S&P util­ity in­dex .SPLRCU rose 0.4 per­cent, the only sec­tor to end in pos­i­tive ter­ri­tory.

The Dow Jones in­dus­trial av­er­age .DJI closed down 295.64 points, or 1.8 per­cent, to 16,153.54, the S&P 500 .SPX lost 36.35 points, or 1.87 per­cent, to 1,903.03 and the Nas­daq Com­pos­ite .IXIC dropped 103.42 points, or 2.24 per­cent, to 4,516.95.

The Dow Jones trans­porta­tion av­er­age .DJT ended 2.9 per­cent lower fol­low­ing news of the first U.S. trans­mis­sion of the Zika virus.

The S&P 500 is down 6.9 per­cent since the start of the year. In­vestors have been con­cerned about a China-led global eco­nomic slow­down, tepid U.S. eco­nomic data, the pace of in­ter­est rate hikes by the Fed­eral Re­serve and weak earn­ings. Fourth-quar­ter S&P 500 earn­ings are ex­pected to have fallen 4.4 per­cent from a year ear­lier, ac­cord­ing to Thom­son Reuters data. Buck­ing the day's trend, Al­pha­bet (GOOGL.O) was up 1.3 per­cent at $780.91. Quar­terly profit beat es­ti­mates late Mon­day and the In­ter­net ma­jor sur­passed Ap­ple as the most valu­able US com­pany.

Af­ter the bell, shares of Chipo­tle fell 3 per­cent af­ter it re­ported its first fall in quar­terly sales at es­tab­lished restau­rants since it went pub­lic. The stock ended the reg­u­lar ses­sion up 0.6 per­cent at $475.67. Also, Ya­hoo dipped 1 per­cent in ex­tended trad­ing fol­low­ing its re­sults.

In­vestors are keep­ing an eye on the U.S. elec­tion cy­cle. Iowa re­sults cre­ated greater un­cer­tainty be­cause there were no clear win­ners, said Rick Meck­ler, pres­i­dent of Lib­er­tyView Cap­i­tal Man­age­ment in Jersey City, New Jersey. "The bot­tom line for peo­ple who are in­vest­ing is they pre­fer a lit­tle more cer­tainty than they are see­ing right now in ei­ther the elec­tion or in the en­ergy mar­kets," he said. About 8.5 bil­lion shares changed hands on U.S. ex­changes, below the 9.2 bil­lion daily av­er­age for the past 20 trad­ing days, ac­cord­ing to data.

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