Oil and gas companies lead an early decline in stocks
ASSOCIATED PRESS
European stocks fell today amid ongoing jitters over the Chinese economy following weak manufacturing data. Japanese stocks, however, extended gains following the Bank of Japan’s decision a week earlier to introduce a negative interest rate policy to boost lending and spur growth.
NEW YORK » Stocks were solidly lower in early trading today, as the price of oil took another tumble amid renewed concerns about the Chinese and U.S. economies.
KEEPING SCORE: The Dow Jones industrial average lost 96 points, or 0.6 percent, to 16,369 as of 10:13 a.m. Eastern. The Standard & Poor’s 500 index lost 11 points, or 0.6 percent, to 1,928 and the Nasdaq composite lost 24 points, or 0.5 percent, to 4,589.
OIL PROBLEMS: Crude oil went lower again after posting solid gains last week. Oil fell $1.22 to $32.37 a barrel. Natural gas took an even steeper tumble, falling more than 6 percent.
Energy stocks fell in tandem with oil and gas prices, and the energy component of the S&P 500 lost 2.3 percent. Southwestern Energy declined 60 cents, or 7 percent, to $8.28, Transocean dropped $60 cents, or 5.8 percent, to $9.81 and Chesapeake Energy fell 12 cents, or 4 percent, to $3.27.
CHINA MANUFACTURING: Global stocks and oil prices started to decline after a Chinese factory purchasing manager survey fell to 49.4 in January, the lowest level in more than three years. It’s the latest sign of weakness for the world’s second-largest economy. Numbers below 50 indicate contraction. Chinese stocks closed down 2 percent on the news.
THE QUOTE: “There are precious few indicators that point to a recovery within China and this continues to spell bad news for the global economy which has been hugely reliant upon Chinese demand to help compensate for weak western demand post-2007,” said Joshua Mahony, market analyst at IG.
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FACTORY WORRIES: The economic data out of the U.S. did not help investor sentiment either. A survey of manufacturing activity in the U.S. came in at 48.2, below economists’ analysts.
BONDS, CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.95 percent. The dollar fell to 120.92 yen from 121.10 yen on Friday. The euro strengthened to $1.0897 from $1.0829.
Youkyung Lee contributed from Seoul, South Korea.
3 responses to “Oil and gas companies lead an early decline in stocks”
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With the Arab oil producing countries putting the squeeze on prices just to drive the US out of the business just wait for our unemployment to go sky high. And, the Iranian oil is just starting to hit the market.
Oil is being used to dethrone the US dollar as the world’s medium of exchange. The emergence of the Euro was the start, however it was not enough as there was no single Union member’s economy strong enough better ours. With the emergence of the Chinese economy second to ours there were hopes. However due to their downturn oils is being used to drive our dollar down. The introduction of the Iranian oil in the market certainly has aided in the downturn of our market. Coincidentally with our negotiations with Iran and the signing of the pact, the market began to move downward,
It doesn’t appear that oil is driving the dollar down. The dollar has been strong.