En­ergy leads mod­est slide in U.S. stocks as oil prices fall

The Trentonian (Trenton, NJ) - - BUSINESS - By Alex Veiga

En­ergy com­pa­nies led U.S. stocks modestly lower Tues­day, eras­ing the small gains the mar­ket made a day ear­lier.

The big­gest drop in crude oil prices since Oc­to­ber weighed on oil pro­duc­ers and other en­ergy stocks. Dis­ap­point­ing re­sults or out­looks from re­tail­ers and other com­pa­nies also weighed on the mar­ket.

Util­i­ties and con­sumer-fo­cused com­pa­nies like pack­aged food and bev­er­age mak­ers, restau­rant chains, bucked the trend.

In­vestors had their eye on Washington D.C., where the House is ex­pected to vote on its ver­sion of a ma­jor tax bill this week. Ex­pec­ta­tions that the tax over­haul will sharply lower cor­po­rate taxes have helped lift the mar­ket higher this year.

“We’re through earn­ings sea­son, which was pretty good, with earn­ings up about 10 per­cent,” said Stu­art Free­man, co-head of global eq­uity strat­egy for Wells Fargo In­vest­ment In­sti­tute. “Now in­vestors are wait­ing and watch­ing to see what shape this tax re­duc­tion bill is go­ing to take.”

The Stan­dard & Poor’s 500 in­dex fell 5.97 points, or 0.2 per­cent, to 2,578.87. The Dow Jones in­dus­trial av­er­age lost 30.23 points, or 0.1 per­cent, to 23,409.47. The Nas­daq com­pos­ite slid 19.72 points, or 0.3 per­cent, to 6,737.87. The Rus­sell 2000 in­dex of smaller-com­pany stocks gave up 3.81 points, or 0.3 per­cent, to 1,471.26.

The steep drop in crude oil prices weighed on oil ex­plo­ration com­pa­nies and other en­ergy sec­tor stocks.

New­field Ex­plo­ration was the big­gest de­cliner in the S&P 500, tum­bling $2.27, or 7.1 per­cent, to $29.82. Range Re­sources lost $1.23, or 6.6 per­cent, to $17.35.

Bench­mark U.S. crude fell $1.06, or 1.9 per­cent, to set­tle at $55.70 per bar­rel on the New York Mer­can­tile Ex­change. That’s the big­gest sin­gle-day de­cline since Oc­to­ber. Brent crude, used to price in­ter­na­tional oils, de­clined 95 cents, or 1.5 per­cent, to close at $62.21 a bar­rel in London.

“There’s this per­cep­tion that there’s a lot of sup­ply wait­ing in the wings and as prices have moved higher that’s made the mar­ginal pro­ducer want to come out and just find more oil,” said Eric Freed­man, chief in­vest­ment of­fi­cer of U.S. Bank Wealth Man­age­ment.

The mar­ket’s spot­light is on re­tail­ers this week, with many of the com­pa­nies re­port­ing quar­terly re­sults over the next few days, in­clud­ing Tar­get Corp., Wal-Mart Stores and Best Buy.

On Tues­day, Home De­pot turned in bet­terthan-ex­pected re­sults and raised its out­look for the year. Shares in the home-im­prove­ment re­tailer rose $2.71, or 1.6 per­cent, to $168.06.

Ad­vance Auto Parts vaulted 16.3 per­cent af­ter the com­pany’s lat­est quar­terly earn­ings ex­ceeded Wall Street’s ex­pec­ta­tions. The stock was the big­gest gainer in the S&P 500, climb­ing $13.44 to $95.72.

Other big re­tail­ers failed to im­press traders. TJX Cos., the par­ent com­pany of T.J. Maxx and Mar­shalls, fell 4 per­cent af­ter it re­ported rev­enue and earn­ings that missed an­a­lysts’ es­ti­mates. Its shares lost $2.82 to $67.94.

Dick’s Sport­ing Goods slid 2.8 per­cent af­ter the re­tailer re­ported a solid quar­ter but also said its earn­ings per share could drop as much as 20 per­cent next year. The stock gave up 73 cents to $25.59.

Gen­eral Elec­tric was among the mar­ket’s big movers, slid­ing sharply for the sec­ond straight day af­ter an­a­lysts down­graded the in­dus­trial con­glom­er­ate. On Mon­day, GE pulled back on profit ex­pec­ta­tions and slashed its div­i­dend in half. The stock tum­bled $1.12, or 5.9 per­cent, to $17.90 Tues­day. It’s now down 43.4 per­cent this year.

In­vestors bid up shares in Buf­falo Wild Wings fol­low­ing a re­port that Roark Cap­i­tal has of­fered to buy the com­pany for $150 a share, or $2.3 bil­lion. Shares in the restau­rant chain soared $28.10, or 24 per­cent, to $145.35.

Bond prices rose. The yield on the 10-year Trea­sury note fell to 2.38 per­cent from 2.41 per­cent late Mon­day.

In other en­ergy fu­tures trad­ing, whole­sale gaso­line gave up 3 cents to $1.76 a gal­lon. Heat­ing oil fell 3 cents to $1.91 a gal­lon. Nat­u­ral gas slid 7 cents to $3.10 per 1,000 cu­bic feet.

Gold rose $4 to $1,282.90 an ounce. Silver added 3 cents to $17.07 an ounce. Cop­per fell 5 cents to $3.07 a pound.


Trader Gre­gory Rowe, left, and spe­cial­ist John McNier­ney work at the post that han­dles Gen­eral Elec­tric on the floor of the New York Stock Ex­change, Tues­day. Stocks are open­ing lower on Wall Street as tech­nol­ogy com­pa­nies, banks and re­tail­ers sink.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.