U.S. Stock Market Sinks As Price Of Crude Oil Resumes A Slide
NEW YORK (AP) — The stock market drifted lower Thursday, giving up some of its gains from the day before. Another plunge in oil prices yanked Chevron, Exxon Mobil and other energy companies down.
KEEPING SCORE: As of 1:35 p.m., the Dow Jones industrial average was off 85 points, or 0.5 percent, to 17,992. The Dow jumped 227 points on Wednesday.
The Standard & Poor's 500 fell eight points, or 0.4 percent, to 2,092. The Nasdaq composite rose 15 points, or 0.3 percent, to 4,997.
CRUDE: Benchmark U.S. oil sank $1.57 to $45.05 a barrel in New York trading, extending a slump that has slashed prices by more than half over the past year. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.21 to $54.70 a barrel in London. Oil and gas companies led eight of 10 industries in the S&P 500 index lower.
HOW LOW? "Given the big drop that we've had the big question is, when does oil hit bottom?" said Jeff Carbone, a senior partner at Cornerstone Financial Partners in Charlotte, North Carolina. "I don't think oil will bottom out until a company or a country flinches and cuts production. Right now producers are still pumping as much as they can."
SHUFFLE: It's Apple's first day as a member of the Dow. The maker of iPhones, iPads and other gadgets replaced AT&T. Goldman Sachs also took Visa's title as the most expensive stock among the blue chips. Because the Dow weighs its 30 companies by their share price instead of their market value, a stock split for Visa pushed the payment processor off its perch.
ECONOMY: The economic news out Thursday gave investors little encouragement to push stocks higher. An index aimed at gauging the economy's momentum rose by a slight amount for a second straight month, and the number of people seeking U.S. unemployment benefits held steady. The Labor Department reported that weekly applications for unemployment aid edged up by 1,000 to 291,000 last week.
THE FED EFFECT: Markets rallied Wednesday after the Federal Reserve signaled that it wasn't in a hurry to raise interest rates. A long period of ultra-low rates has helped lift stock and bond prices by keeping the cost of borrowing cheap. The Fed has held its benchmark interest rate close to zero since 2008.
EUROPE: Most major markets in Europe finished with slight losses. Germany's DAX fell 0.3 percent, while France's CAC 40 dropped 0.2 percent. Britain's FTSE 100 edged up 0.1 percent.
ASIA'S DAY: Japan's benchmark Nikkei 225 slipped 0.4 percent. South Korea's Kospi added 0.5 percent, and Hong Kong's Hang Seng jumped 1.5 percent. Other Asian markets ended with gains, including those in Taiwan, Singapore, Indonesia and the Philippines.
BACK IN THE STATES: Prices for U.S. government bond prices slipped, nudging yields up. The yield on the 10-year Treasury note rose to 1.96 percent from 1.92 percent on Wednesday.
– by AP Reporter Matthew Craft