Energy stocks lead another decline as oil price weakens

AP News
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Posted: Dec 08, 2015 9:40 AM
Energy stocks lead another decline as oil price weakens

NEW YORK (AP) — Energy stocks are falling again as the price of oil continues to slide.

Most of the biggest decliners in early trading Tuesday were oil and gas companies. Devon Energy lost 8 percent, Kinder Morgan fell 7 percent and Southwestern Energy fell 5 percent.

U.S. crude dropped another 2 percent to $37 a barrel. Oil is the lowest it's been since early 2009.

In other trading, Chipotle Mexican Grill fell another 4 percent after people were sickened after eating at one of the company's restaurants in Boston.

The Dow Jones industrial average fell 206 points, or 1.2 percent, to 17,519 as of 9:35 a.m. Eastern time.

The Standard & Poor's 500 index gave up 22 points, or 1.1 percent, to 2,054. The Nasdaq composite dropped 54 points, or 1.1 percent, to 5,046.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Global stock markets fell sharply Tuesday as oil prices remained near six-and-a-half year lows following last week's decision by the OPEC oil cartel to leave production unchanged.

KEEPING SCORE: In Europe, Germany's DAX fell 1.2 percent to 10,750 while the CAC-40 in France was 1.2 percent lower at 4,701. The FTSE 100 index of leading British shares was down 0.9 percent at 4,698. U.S. stocks were poised for a lower open with Dow futures and the broader S&P 500 futures both 0.7 percent lower.

OIL SLUMP: Last week's decision by OPEC to maintain production levels has hit oil prices hard over the past two trading sessions. On Tuesday, oil prices recouped some losses but still remain near their lowest levels since early 2009, when the world economy was in its deepest recession since World War II. Brent crude, the international standard, was up 60 cents at $41.33 per barrel in London after plunging $2.27 on Monday. Benchmark U.S. crude gained 28 cents to trade at $37.93 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.32 on Monday.

OIL STOCKS: Shares in oil companies have suffered as traders price in the prospect of lower future earnings and the impact it will have on production plans — low oil prices make many projects uneconomic. Among the fallers were Britain's BP, which was down 1.5 percent, and France's Total, which dropped 1.8 percent.

ANALYST TAKE: "The renewed decline in the oil price in the aftermath of last Friday's OPEC meeting is the main focus of financial markets and is weighing on equity prices," said Neil MacKinnon, global macro strategist at VTB Capital.

ANGLO AMERICAN: Shares in the mining firm Anglo American plunged by more than 8 percent after it said it would shed around 85,000 employees — or 63 percent of its workforce — amid a radical restructuring program meant to cope with the tumble in commodities prices.

CHINA TRADE: Customs data showed imports and exports shrank again in November, though there were signs weak domestic demand might be improving. Exports contracted by 6.8 percent, accelerating from October's 3.6 percent fall. Imports fell 8.7 percent, an improvement over the previous month's 16 percent decline. Import volumes of some goods such as crude oil, fresh fruit and cooking oil rose.

ASIA'S DAY: China's Shanghai Composite Index fell 1.9 percent to 3,470.07 and Japan's Nikkei 225 lost 1 percent to 19,492.60. Australia's S&P/ASX 200 retreated 0.9 percent to 5,108.60 and Seoul's Kospi declined 0.7 percent to 1,949.04. India's Sensex was off 0.5 percent at 25,401. Taiwan, Singapore, Jakarta and New Zealand also declined.

CURRENCIES: The dollar was slightly softer Tuesday. The euro was up 0.3 percent at $1.0875 while the dollar fell 0.3 percent to 122.98 yen.