comscore Stocks edge lower on earthquake in Japan, tsunami | Honolulu Star-Advertiser
Top News

Stocks edge lower on earthquake in Japan, tsunami

[ AD HAS BEEN REMOVED FROM THIS STORY ]

NEW YORK » Stocks bounced between small gains and losses in early trading Friday as investors tried to gauge the economic fallout from a massive earthquake that struck off the east coast of Japan, triggering huge tsunami waves that killed hundreds of people.

The earthquake came toward the end of the Asian trading session. Tsunami alerts were issued for areas as far away as the West coast of the U.S.

The prospect of a short-term drop in demand for crude from Japan, the world’s third-largest oil consumer, sent oil prices sharply down. Oil dipped below $100 for the first time this month. Crude fell $2.16 to $100.54 a barrel.

The Dow Jones industrial average fell 30 points, or 0.3 percent, to 11,953 in morning trading. The Standard & Poor’s 500 fell 0.6, or less than 1 percent, to 1,294.

Energy companies, which drove stocks lower Thursday, were among the biggest gainers in the S&P 500. Tesoro Corp. rose 6.5 percent, the biggest gain in the S&P 500. Valero Energy Corp. rose 5.4 percent after the company agreed to buy oil refineries from Chevron Corp. in the U.K. and Ireland.

The Nasdaq composite fell 6.1, or 0.2 percent, to 2,694.

The quake caused a selloff in global stock markets, led by sharp drops in insurance companies. Japan’s Nikkei closed down 1.7 percent. The yen remained stable, however, because it is seen as a relatively safe investment for international traders.

In addition to the earthquake, another factor pushing oil prices lower was relief that a day of protests in Saudi Arabia only drew small numbers, and none in the capital. Oil traders have been worried the violence in the middle east and North Africa would spread to the world’s No. 1 oil exporter.

Oil prices have surged 24 percent since the middle of February, when the violence in Libya escalated.

A strong report on U.S. retail sales was largely overshadowed by the earthquake in Japan and other world events.

"Issues in Japan and potential tsunamis are dominating the conversation, so we’re not really talking about retail sales," said Ryan Detrick, senior technical strategist for Schaeffer’s Investment Research.

The Commerce Department reported that retail sales rose 1 percent in February, the biggest gain in four months and more than the 0.8 percent analysts had expected. Shoppers laid out more cash for cars, clothing and gadgets in February, leading to an eighth month of gains.

Stocks fell sharply Thursday on weak economic news from China, the U.S. and Spain combined with a slump in oil company shares. The Dow Jones industrial average had its biggest drop since August 11. Other than several large swings in the past month, stocks have been climbing steadily since September.

"It could be time for a well-deserved rest," said Detrick. "The markets had a spectacular six-month rally and now they’re showing some slight cracks."

 

Click here to see our full coverage of the coronavirus outbreak. Submit your coronavirus news tip.

Be the first to know
Get web push notifications from Star-Advertiser when the next breaking story happens — it's FREE! You just need a supported web browser.
Subscribe for this feature
Comments have been disabled for this story...

Scroll Up