Plunging oil prices weigh on stocks
Associated Press
NEW YORK — Oil prices and energy companies plunged Thursday, but other stocks didn’t move much as investors waited for more signs about the state of the economy.
Household goods makers and health care companies rose following some solid company earnings reports. Most other parts of the market made little gains, but energy companies took sharp losses as the price of crude oil fell almost 5 percent. That was its biggest one-day loss in about two months.
“We may be seeing signs that global production is strong, and whenever markets see a decline in oil prices they worry it’s actually an indication of weak demand,” said Kate Warne, an investment strategist for Edward Jones.
Ms. Warne said oil prices have slipped recently because of an accumulation of concerns about rising energy production in the U.S. and slower economic growth in the U.S. and China.
Health care stocks didn’t react much to the narrow passage in the House of Representatives of a bill intended to roll back much of former President Barack Obama’s health care law. The bill now heads to the Senate, where its fate is less certain.
Broader market measures did tick higher after the bill was passed, however, as investors hoped the Republican-controlled Congress may be in a better position to compromise on business-friendly polices such as tax cuts.
The Standard & Poor’s 500 index rose 1.39 points, or 0.1 percent, to 2,389.52. The Dow Jones industrial average lost 6.43 points to 20,951.47. The Nasdaq composite added 2.79 points to 6,075.34. The Russell 2000 index of small-company stocks dipped 2.08 points, or 0.1 percent, to 1,388.85. On the New York Stock Exchange, two out of every three stocks fell.
U.S. benchmark crude futures shed another $2.30, or 4.8 percent, to $45.52 a barrel in New York. Brent crude, the standard for international oils, fell $2.41, or 4.7 percent, to $48.38 a barrel in London. Oil has fallen to its lowest price since November as investors wonder if the OPEC cartel will extend an agreement to cut production and support prices. OPEC nations will discuss that deal later this month.
Exxon Mobil skidded $1.06, or 1.3 percent, to $81.64 and EOG Resources lost $3.16, or 3.4 percent, to $88.60. Chesapeake Energy tumbled 41 cents, or 7.4 percent, to $5.13.
Other parts of the market were quiet. The government will release its monthly jobs report Friday morning, and Ms. Warne said the April report may get an outsize level of attention because the previous jobs report was disappointing and the economy didn’t grow much in the first quarter.
“A strong jobs report for April would suggest that first quarter’s weakness was transitory,” she said.
Church & Dwight, which makes Arm & Hammer baking soda, Trojan condoms and OxiClean cleaners, raised its profit estimate after its first-quarter results were better than analysts anticipated. Its stock rose $2.10, or 4.3 percent, to $50.85. Frosted Flakes and Pop Tarts maker Kellogg posted a larger profit than expected and its stock gained $1.46, or 2.1 percent, to $70.40.
Bond prices dropped for the second day in a row. The yield on the 10-year Treasury note rose to 2.35 percent from 2.32 percent. That helped bank stocks because it allows them to make bigger profits on loans.