U.S. Stocks Fall as Oil Keeps Sliding
December 07 2015 - 3:53PM
Dow Jones News
By Dan Strumpf And Riva Gold
U.S. stocks fell Monday, led lower by a selloff in energy shares
as oil prices plumbed new lows.
The Dow Jones Industrial Average lost 149 points, or 0.8%, to
17698. The S&P 500 dropped 0.9%. The Nasdaq Composite declined
0.9%.
Energy companies posted the sharpest losses among major sectors,
with energy stocks in the S&P 500 shedding 4.1%.
Crude-oil futures in New York lost 5.5% to $37.77 a barrel
following last week's meeting of the Organization of Petroleum
Exporting Countries. The cartel ended its meeting with no agreement
to cut production.
In the Dow, Exxon Mobil and Chevron posted the sharpest
losses.
"Oil down in the $38 range is the bulk of what you see
equity-market weakness from," said Michael Antonelli, equity sales
trader at Robert W. Baird."You've seen a lot of people over the
last three or four months looking for a low in energy, but it just
remains elusive."
Stocks rose sharply last Friday after a stronger-than-expected
U.S. jobs report helped cement expectations that the Fed will start
raising rates at its Dec. 15-16 meeting.
The Dow industrials rose 2.1% to cap a tumultuous week, pushing
the index back into positive territory for the year.
On Monday, stocks in Europe pared their earlier gains. The Stoxx
Europe 600 Index edged up 0.5% after rising more than 1% earlier in
the session. Stocks there fell late last week after the ECB
announced less aggressive stimulus measures that left many
investors disappointed.
ECB President Mario Draghi sought to reassure investors on
Friday that the central bank would "no doubt" step up its stimulus
program if needed. The comments came after European markets closed
for the weekend.
The losses in European stock markets on Thursday and Friday
"reflected a massive overreaction" to ECB policy, said Ben Kumar,
investment manager at Seven Investment Management, noting the bank
still cut rates and extended its stimulus program.
"I think everyone believes payrolls data Friday was the last
thing that could change the Fed's mind," Mr. Kumar said. "We're all
set for a rate rise."
The euro was down 0.3% against the dollar. It had surged after
Thursday's ECB announcement.
Shares of Chipotle Mexican Grill Inc. fell 2.4% after the
restaurant chain said late Friday that its recent E. coli outbreak
would cut deeply into sales and earnings from the current
quarter.
Keurig Green Mountin Inc. shares soared 73% after the maker of
coffee pods and machines agreed to be bought by an investor group
led by JAB Holding Co. for $13.9 billion, a sizeable premium.
While ultralow interest rates have boosted equity markets in
recent years, investors have been reassured by comments from Fed
Chairwoman Janet Yellen suggesting monetary policy in the U.S. will
tighten at a gradual pace.
"The Fed is still pretty dovish," said Sanjiv Shah, chief
investment officer at Sun Global Investments. The jobs report left
investors thinking that the U.S. economy was doing reasonably well,
Mr. Shah said, but noted that Ms. Yellen has signaled policy will
still normalize slowly.
Japan's Nikkei 225 Stock Average joined the rally on Monday to
close 1% higher.
Concerns about Chinese data due later in the week and a fall in
energy stocks kept a lid on gains elsewhere in Asia. Australia's
S&P/ASX 200 ended 0.1% higher and the Shanghai Composite added
0.3%.
Gold declined 0.8% at $1,075.30 an ounce.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Riva Gold at
riva.gold@wsj.com
(END) Dow Jones Newswires
December 07, 2015 15:38 ET (20:38 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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