Energy drags on Wall Street as oil falls further; airlines slide
US stocks fell on Tuesday as oil prices dropped to their lowest since November and airlines pulled industrial stocks down as a blizzard hit the US Northeast. Hospital operator shares were hit after a nonpartisan research report showed 14 million Americans would lose medical insurance by next year under a Republican proposal.
US STOCKS fell on Tuesday as oil prices dropped to their lowest since November and airlines pulled industrial stocks down as a blizzard hit the US Northeast.
Hospital operator shares were hit after a nonpartisan research report showed 14 million Americans would lose medical insurance by next year under a Republican proposal.
Trading volume was light ahead of a Federal Reserve statement due on Wednesday in which the US central bank is expected to raise interest rates by 25 basis points.
Airline stocks dropped as a blizzard swept through the heavily populated northeastern United States, grounding thousands of flights. United Continental fell 4.70% to $66.55 while Southwest Airlines dropped 3% and American Airlines lost 2.70%.
Oil prices slid to the lowest since late November after the Organization of the Petroleum Exporting Countries ( OPEC) reported a rise in global crude inventories and raised its forecast of production in 2017 from outside the group, suggesting complications in an effort to clear a glut and support prices.
The S& P energy sector fell 1.10% to close at its lowest since Nov. 4. Chevron was off 1.80% and was the biggest drag on the Dow and the S&P 500.
“None of the data you’re getting is good if you’re trying to increase (crude) prices; it doesn’t look like oil supply is diminishing,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, adding that energy sector earnings have little upside potential so their stocks’ underperformance is to be expected.
The Dow Jones Industrial Average fell 44.11 points or 0.21% to 20,837.37, the S&P 500 lost 8.02 points or 0.34% to 2,365.45 and the Nasdaq Composite dropped 18.97 points, or 0.32%, to 5,856.82.
About 6.23 billion shares changed hands on US exchanges, compared with the 6.93 billion daily average over the last 20 sessions. Declining issues outnumbered advancing ones on the NYSE by a 1.99-to-1 ratio; on Nasdaq, a 2.09-to-1 ratio favored decliners. The S& P 500 posted 14 new 52-week highs and four new lows; the Nasdaq Composite recorded 55 new highs and 60 new lows.
Shares of hospital operators fell after the US Congressional Budget Office forecast that 14 million Americans would lose medical insurance by next year under a Republican plan to dismantle Obamacare.
Among hospital stocks, HCA Holdings slipped 1.50%, Tenet Healthcare fell 3.30%, Community Health Systems shed 2.20% and LifePoint Health was down 1.50%. —