Wall Street slides after Saudi attacks; energy stocks surge

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on July 19, 2018 in New York. — AFP pic
Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on July 19, 2018 in New York. — AFP pic

NEW YORK, Sept 16 — slipped today on worries after the weekend attack on Saudi Arabian crude facilities knocked out 5 per cent of the world’s supply, while a more than 10 per cent jump in oil prices lifted beaten-down energy stocks.

The attack on the world’s biggest oil exporter sent oil prices up as much as 20 per cent before they eased off their peaks as US President Donald Trump authorised the use of the country’s emergency oil stockpile to ensure stable supplies.

The S&P 500 Energy, one of the worst performing sectors this year, soared 3.18 per cent, its best day since 4.

At least 14 of the top advancers on the S&P 500 were energy stocks. Shares of Marathon Oil Corp and Devon Energy Corp rose more than 8 per cent each and led the gains.

The supply disruptions should put a bid into US energy stocks, which have meaningfully lagged the broader market, JPM analysts wrote in a note.

“In particular, we could see a positive move in the oily small and mid-cap group.”

Meanwhile, anticipation of higher fuel costs drove down shares of airlines and cruise line operators. American Airlines Group Inc, Delta Air Lines Inc and Carnival Corp fell between 2 per cent and 5 per cent.

Ten of the major S&P sectors were lower, with technology shares weighing the most.

Investors’ flight to safety pulled the US benchmark 10-year Treasury yields down from their multi-week highs, sending the interest-rate sensitive bank sub-sector down about 1 per cent.

At 9.44am ET, the Dow Jones Industrial Average was down 104.17 points, or 0.38 per cent, at 27,115.35, the S&P 500 was down 9.48 points, or 0.32 per cent, at 2,997.91. The Nasdaq Composite was down 28.40 points, or 0.35 per cent, at 8,148.32.

This week’s centrepiece is the Federal Reserve’s monetary policy decision on Wednesday where the is widely expected to deliver the second interest rate cut this year of a quarter basis points.

Hints on whether the central bank will keep easing its monetary policy will be crucial in determining how long Wall Street’s strong rally will last.

Cooling trade tensions between the United States and last week has brought the benchmark S&P 500 about 1 per cent below its record high.

Among other movers, General Motors Co fell 2.7 per cent after the United Auto Workers (UAW) went on strike yesterday, the first nationwide strike at GM in 12 years.

Declining issues outnumbered advancers for a 1.11-to-1 ratio on the NYSE and a 1.23-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and one new low, while the Nasdaq recorded 12 new highs and eight new lows. — Reuters

Source: The Malay Mail Online

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