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S&P, Dow fall as oil drop hurts energy

By Thomson Reuters Foundation - May 26,2018 - Last updated at May 26,2018

People walk by a Wall Street sign close to the New York Stock Exchange in New York, US, on April 2 (Reuters file photo)

NEW YORK — The S&P 500 and the Dow eased on Friday after a steep drop in oil prices pressured energy stocks, but losses were limited by gains in chipmakers and retail stocks.

US crude tumbled 4 per cent to settle at $67.88 a barrel after Saudi Arabia and Russia said they were ready to ease supply curbs that have pushed prices to their highest since 2014.

The S&P energy index slid 2.6 per cent and registered its biggest daily percentage drop since early February, while Chevron dropped 3.5 per cent and Exxon Mobil fell 1.9 per cent and were among the biggest drags on the Dow and S&P 500.

“It’s been a very rough week for oil, and that has weighed” on energy names, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. At the same time, the continued pullback in yields has pressured financials, he said. 

The S&P 500 banks index fell 0.4 per cent after US Treasury yields hit their lowest in three weeks.

Stock markets this week also have been roiled by trade tensions with China, a US threat of imposing tariffs on imported cars and uncertainty over a US-North Korea summit. 

President Donald Trump said on Friday the summit with North Korean leader Kim Jong-un could still take place on June 12 as originally planned, a day after canceling it.

The Dow Jones Industrial Average fell 58.67 points, or 0.24 per cent, to 24,753.09, the S&P 500 lost 6.43 points, or 0.24 per cent, to 2,721.33 and the Nasdaq Composite added 9.43 points, or 0.13 percent, to 7,433.85.

For the week, the Dow was up 0.2 per cent, the S&P 500 was up 0.3 per cent and the Nasdaq gained 1.1 per cent.

The Nasdaq was boosted by chipmakers, including Broadcom, which rose 2.7 per cent. Intel climbed 1.3 per cent.

A 20.2 per cent surge in shares of Foot Locker boosted the S&P consumer discretionary index, which rose 0.2 per cent, after the company reported a better-than-expected quarterly profit and helped shares edge higher in Nike, which has a partnership with the footwear retailer.

The S&P retail index rose 0.2 per cent.

Trading volume was lighter than usual ahead of the long weekend, with markets shut on Monday for the Memorial Day holiday.

About 5.8 billion shares changed hands on US exchanges. That compares with the 6.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by a 1.25-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favoured advancers.

The S&P 500 posted 20 new 52-week highs and one new low; the Nasdaq Composite recorded 104 new highs and 36 new lows.

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