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Stocks Drop as Energy Stocks Slump     07/31 16:24

   Stocks closed modestly lower Friday as oil titans Exxon Mobil and Chevron 
led a slump in energy stocks.

   NEW YORK (AP) -- Stocks closed modestly lower Friday as oil titans Exxon 
Mobil and Chevron led a slump in energy stocks.

   The Dow Jones industrial average lost 56.12 points, or 0.3 percent, to 
17,689.86. The Standard & Poor's 500 index lost 4.71 points, or 0.2 percent, to 
2,103.92. The Nasdaq composite closed little changed, down half a point to 
5,128.28.

   It's was a see-saw week for the market, but all three major indexes closed 
higher by roughly 1 percent.

   Shares of Exxon Mobil and Chevron, the two largest publicly traded energy 
companies, fell roughly 5 percent each on Friday. Both companies posted major 
declines in their year-over-year profits largely due to the big drop in the 
price of oil.

   In the case of Exxon, earnings fell 52 percent from a year earlier, causing 
the company to report its lowest quarterly profit since June 2009. Exxon shares 
fell $3.80, or 4.6 percent, to $79.21.

   Chevron, hurt by low oil prices and a write-off of some of its assets, 
reported its lowest profit in 13 years. The company reported a profit of 30 
cents a share, well below the $1.13 analysts expected. Chevron fell $4.55, or 
4.9 percent, to $88.48.

   Exxon and Chevron dragged down other energy stocks. The S&P 500 energy 
sector slumped 2.6 percent, its biggest drop since January.

   Energy companies have been a major drag on corporate earnings in the second 
quarter. S&P 500 companies are on track for a 1.3 percent year-over-year 
decline in earnings, according to FactSet. If energy were excluded, corporate 
profits would be up 5.4 percent.

   Even with oil prices down more than 50 percent from a year ago, crude has 
continued to fall. Oil prices declined sharply again Friday on continuing 
concerns over high global supplies and weak demand, helping push oil down 21 
percent for the month.

   Benchmark U.S. crude fell $1.40 to close at $47.12 a barrel in New York. 
Crude fell $12.35 a barrel during the month, from $59.47 at the end of June. 
Brent crude, a benchmark for international oils used by many U.S. refineries, 
fell $1.10 to close at $52.21 in London.

   A disappointing economic report also weighed on stocks.

   U.S. wages and benefits grew at their slowest pace in 33 years in the 
spring, the Labor Department said, stark evidence that the improving job market 
is having little impact on paychecks for most Americans. The slowdown likely 
reflects a sharp drop-off in bonus and incentive pay for some workers.

   The lackluster wage growth suggests that companies are still able to find 
the workers they need without boosting pay, a sign the job market is not yet 
back to full health. That could cause the Federal Reserve hold of any increase 
in interest rates.

   Bond prices rose after the report, pushing the 10-year U.S. Treasury note 
down to 2.19 percent from 2.26 percent on Thursday.

   "I can't imagine the Fed is looking at (this data) this morning as a reason 
to increase rates in September," said Tom di Galoma, head of rates trading at 
ED&F Man Capital.

   In other energy markets, wholesale gasoline rose 1.3 cents to close at 
$1.841 a gallon. Heating oil fell 1.4 cents to close at $1.584 a gallon. 
Natural gas fell 5.2 cents to close at $2.716 per 1,000 cubic feet.

   In currencies, the dollar fell 0.3 percent to 123.90 yen and the euro rose 
0.4 percent to $1.0985.

   In metals trading, gold rose $6.50 to $1,095.90 an ounce and silver rose 5 
cents to $14.75 an ounce. Copper fell 1 cent to $2.43 per pound.


(KA)


 
 
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