Midday Update: Wall Street Buckles As Energy Stocks Extend Selloff
Stocks were facing very heavy selling pressure again on Friday after the price of a barrel of oil fell to a seven-year low and fresh concerns over the Chinese economy drove the yuan to its lowest level since 2011. All ten of the S&P 500 sectors are in the red today, with energy and material stocks taking the biggest loses.
Although there are a number of issues weighing on Wall Street today, the ongoing retreat in oil prices was the catalyst for a more than 200 point loss for the Dow Jones Industrial Average at the open. Amid fresh supply pressures, front-month futures contracts for West Texas Intermediate crude were trading below $36 per barrel, driving energy shares significantly lower.
The broad-based selloff in equities nearly eclipsed the $130 billion merger between chemical giants Dow Chemical ( DOW ) and DuPont ( DD ). The companies eventually plan on creating three publicly-traded companies focusing on agriculture, material sciences and specialty products, respectively.
Overseas markets were also unnerved by a free-fall for China's currency, exacerbated by reports another Chinese executive was taken by police at a Shanghai airport. The move followed the recent disappearance of two top executives from China's largest brokerage firm as the country cracks down on corruption and stock market manipulation.
Economic data today failed to put much of a dent in the selling pressure despite a higher-than-expected rise for producer prices and consumer sentiment improving during December. Nominal and core PPI both climbed 0.3% in November, beating expectations of a rise of 0.0% and 0.1%, respectively.
November retail sales rose a very modest 0.2%, missing estimates looking for a 0.3% gain. But excluding auto sales, retail sales rose a better-than-expected 0.4% and climbed 0.5% excluding both auto and gas sales.
Business inventories were unchanged during October compared with the consensus view expecting a 0.1% advance while the preliminary University of Michigan consumer sentiment index rose to a 91.8 reading this month, topping November's final 91.3 score but trailing market estimates looking for a 92.0 reading.
European markets all finished sharply lower Friday with heavy losses in oil and commodity-related stocks, as well as defensive positioning before next week's Federal Open Market Committee meeting. With the U.S. expected to boost interest rates next week, shares of emerging markets were pressured as well.
Crude oil was down 96 cents to $35.80 per barrel. Natural gas was down 2 cents to $2.00 per 1 million BTU. Gold was up $3.30 to $1,075.40 per ounce, while silver was down 20 cents to $13.91 per ounce. Copper was up 5 cents to $2.12 per pound.
Among energy ETFs, the United States Oil Fund was down 2.42% to $11.10 with the United States Natural Gas Fund was down 0.13% to $7.83. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 1.44% to 14.41 while SPDR Gold Shares were up 0.41% to $102.96. The iShares Silver Trust was down 1.34% to $13.27.
Here's where the U.S. markets stood at mid-day:
NYSE Composite Index down 173.28 (-1.70%) to 9,998.76
Dow Jones Industrial Average down 288.56 (-1.64%) to 17,286.19
S&P 500 down 35.40 (-1.72%) to 2,016.83
Nasdaq Composite Index down 97.47 (-1.93%) to 4,947.71
Nikkei 225 Index up 0.97%
Hang Seng Index down 1.11%
Shanghai China Composite Index down 0.61%
FTSE 100 Index down 2.22%
CAC 40 down 1.84%
DAX down 2.44%
NYSE SECTOR INDICES
NYSE Energy Sector Index down 3.36%
NYSE Financial Sector Index down 1.75%
NYSE Healthcare Sector Index down 1.27%
(+) FNSR (+20.70%) Posted better-than-expected Q2 adjusted earnings and revenues, and issued in line guidance for Q3
(+) GLW (+3.05%) Agreed to definitive agreements with Dow Chemical ( DOW ) to restructure the ownership in the Dow Corning joint venture
(+) SUNE (+2.57%) Acquired Bingham and Oakfield wind farm assets for $209 million in equity
(+) PBMD (+2.51) Announced progress in collaboration with NEC Corp and Yamaguchi Univ in Japan
(-) UDF (-30.45%) Allegations that the "fund is trying to unlawfully profit by manipulating depressed prices."
(-) LNTH (-20.69%) Names interim CFO
(-) CYTX (-16. 61%) Will present plan to remain listed on Nasdaq
(-) PBYI (-11.64%) Shows 3-Yr disease-free survival rate of Neratinib, just above placebo results
(-) NDSN (-5.94%) Reported weaker than expected earnings for Q4 and downbeat forecast for current quarter
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