Sink­ing en­ergy stocks pull S&P 500 to fourth straight loss

The Trentonian (Trenton, NJ) - - BUSINESS - By Stan Choe

NEW YORK » U.S. stocks took an­other small step back­ward on Wed­nes­day af­ter a plunge in the price of oil dragged down shares of en­ergy pro­duc­ers. The losses over­shad­owed gains for tech­nol­ogy com­pa­nies and other ar­eas of the mar­ket.

The Stan­dard & Poor’s 500 in­dex dipped by a frac­tion of a point, down 0.30 to 2,629.27, and it’s down just 0.5 per­cent so far this week. But even those mod­est move­ments could count as no­table in a year that’s been un­usu­ally calm and easy for in­vestors. It was the fourth straight loss for the in­dex, the first time that has hap­pened since March.

The Dow Jones in­dus­trial av­er­age fell 39.73 points, or 0.2 per­cent, to 24,140.91, the Nas­daq com­pos­ite rose 14.16, or 0.2 per­cent, to 6,776.38 and the Rus­sell 2000 in­dex of small-cap stocks lost 7.88, or 0.5 per­cent, to 1,508.88.

Stocks have been mostly drift­ing lower this week fol­low­ing a strong run for mar­kets this year. The ups and downs have come as the Se­nate and House of Rep­re­sen­ta­tives try to iron out dif­fer­ences in their pro­pos­als to over­haul the tax sys­tem, and in­vestors shift their port­fo­lios to­ward com­pa­nies that stand to ben­e­fit most from lower rates.

“It looks like we topped out last week and we’ve been rolling a bit,” said Phil Or­lando, chief eq­uity mar­ket strate­gist at Fed­er­ated In­vestors. “The re­al­ity is we had a phe­nom­e­nal run here, and we looked a lit­tle over­bought in my mind. So I wouldn’t at all dis­count a lit­tle bit of a cor­rec­tion here of 2 or 3 per­cent.”

The mar­ket, which is still up more than 17 per­cent for the year, is also in a rel­a­tively quiet pe­riod, Or­lando said. Com­pa­nies have fin­ished re­port­ing how much profit they made in the sum­mer, and fourth-quar­ter re­ports won’t start again in earnest for more than a month. That can lead to a drift­ing mar­ket.

The mar­ket’s big­gest movers were en­ergy stocks, which sank with the price of oil. Bench­mark U.S. crude fell $1.66 to set­tle at $55.96 per bar­rel. Brent crude, the in­ter­na­tional stan­dard, lost $1.64 to $61.22 a bar­rel.

That led to a 1.3 per­cent loss for en­ergy stocks in the S&P 500, the sharpest drop among the 11 sec­tors that make up the in­dex. Oil com­pany New­field Ex­plo­ration fell $2.12, or 6.9 per­cent, to $28.44 for the big­gest loss of any stock in the S&P 500.

Com­pa­nies in the den­tal in­dus­try were also weak, hurt by fears that their in­dus­try is the next that Ama­zon will up­end. Pat­ter­son Com­pa­nies lost $1.51, or 4.2 per­cent, to $34.81, and Henry Schein fell $3.52, or 5 per­cent, to $67.58.

An­a­lysts at Mor­gan Stan­ley cut their fi­nan­cial es­ti­mates for the com­pa­nies on signs that Ama­zon has got­ten ac­cess to a key den­tal equip­ment maker and may line up others in com­ing years, among other fac­tors.

On the win­ning side was DaVita, which jumped to the big­gest gain in the S&P 500 af­ter Unit­edHealth Group said it will buy DaVita’s med­i­cal group, which serves pa­tients through nearly 300 med­i­cal clin­ics, for $4.9 bil­lion in cash. DaVita gained $8.27, or 13.6 per­cent, to $69.20.

Tech­nol­ogy stocks also rose, and they re­cov­ered some of their losses from ear­lier in the week.

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