Energy, mining stocks lead drop
U.S. stocks closed modestly lower Monday as a deepening slump in crude oil prices pulled down energy and mining stocks on a trading day that was lighter than usual.
Chevron fell 1.8%, the most in the Dow Jones industrial average. Consol Energy sank 9%.
After recovering a bit last week, U.S. crude fell 3% amid reports that Iran intends to increase exports by 500,000 barrels a day once economic sanctions are removed. That would add to excess global supplies that have helped depress oil prices.
Investors worry that falling oil prices could be a signal of further economic weakness ahead, said Paul Christopher, head global market strategist at Wells Fargo Investment Institute.
“We don’t think that’s the case, but we think that’s what’s weighing on the market today,” Christopher said.
The Dow lost 23.90 points, or 0.1%, to 17,528.27. The Standard & Poor’s 500 index fell 4.49 points, or 0.2%, to 2,056.50. The Nasdaq composite shed 7.51 points, or 0.2%, to 5,040.99.
Energy and mining companies felt the brunt of the sell-off. Chevron fell $1.69 to $90.36 and Exxon Mobil lost 59 cents, or 0.7%, to $78.74. Consol Energy tumbled 78 cents to $7.87 and Chesapeake Energy slid 38 cents, or 8.5%, to $4.07.
Mining company Freeport-McMoRan sank 9.5% after news that James R. Moffett, Freeport’s executive chairman and co-founder, is stepping down. The move follows the recent revelation that activist investor Carl Icahn has taken a huge stake in the company. The stock shed 72 cents to $6.85.
Benchmark U.S. crude shed $1.29, or 3.4%, to close at $36.81 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price international oils, lost $1.27, or 3.4%, to close at $36.62 per barrel in London.
Among other stocks making big moves Monday, Valeant Pharmaceuticals lost 10.5% after the company announced that Chief Executive J. Michael Pearson is taking a medical leave of absence. Pearson was hospitalized with pneumonia last week. Three executives will take over for Pearson during his absence. The company’s stock fell $11.97 to $102.14.