Shares of oilfield services companies dropped sharply Thursday after crude prices fell more than 4 percent as the slowing global economy raised concerns about long-term demand for energy products.
Benchmark crude fell $3.92, or 4.3 percent, to $88 a barrel in afternoon trading on the New York Mercantile Exchange.
The government said Thursday that the number of people who applied for unemployment benefits for the first time fell slightly last week to 400,000. The total remained higher than the 375,000 level that economists say indicates a healthy job market.
That added to mounting evidence that the U.S. economy is slowing. Reports this week have said that factory orders fell in June, that the service industry grew in July at the slowest rate in 17 months and that consumer spending fell in June for the first time in nearly two years.
In Europe, there are concerns that Italy and Spain may need help from the European Union to repay debts, adding to the region's financial problems.
Some oil companies also have turned in disappointing second-quarter results; including Marathon Oil Corp., which said this week that its net income rose almost 41 percent but unexpected downtime at international operations hurt sales. Those operations are now back to capacity.
Last week, French oil company Total SA said production slipped 2 percent in the second quarter to 2.31 million barrels a day from 2.36 million barrels a day in the year-ago quarter. Scheduled maintenance shutdowns and disruptions from the war in Libya caused much of the decline.
Investors worry that the companies that provide equipment and other services to oil producers will be affected by a slowdown in demand for oil and gas if the global economy falters.
In afternoon trading, Schlumberger Ltd. fell $3.70, or 4.2 percent, to $83.49; Halliburton Co. dropped $2.98, 5.6 percent, to $50.08; National Oil Varco Inc. lost $5.21, or 6.7 percent, to $72.37; Baker Hughes Inc., fell $3.65, or 5.1 percent, to $68.17; and Cameron International Corp. fell $2.15, or 4.1 percent, to $50.68.
Diamond Offshore Drilling Inc. fell $3.14, or 4.8 percent, to $62.47; Nabor Industries Inc. dropped $1.67, or 6.7 percent, to $23.23; Helmerich & Payne Inc. lost $3.63, or 5.7 percent, to $60.37; and Rowan Companies Inc. lost $2.64, or 6.9 percent, at $35.82.