The stock markets in the United States dropped as investors sell their positions in energy companies amid the continued decline of oil prices. Crude fell to a five-year low.
In a telephone interview with Bloomberg, Frank Ingarra, head trader at NorthCoast Asset Management commented, “Oil is leading the way down and a lot of people are in the oil trade, so they are getting hammered more than others. He added that investors are “maybe scrambling to create liquidity.”
Many value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More
Laszlo Birinyi, president and founder of Birinyi Associates told CNBC that he doesn’t want to touch the oil stocks.
According to Bloomberg, the equities of energy companies in the S&P 500 were trading at a 17th month low. Crude entered the bear market this year due to the increase of supply and the OPEC decided to maintain its target output.
Ole Hansen, head of commodity strategy at Saxo Bank A/S said, “Rising supply at a time of subdued growth outside the U.S. combined with a relentless drive higher in the dollar has increased the competition among oil producers. We can expect a prolonged battle where the risk of lower prices exists.”
The S&P 500 gained 11% amid speculation that the economy of the United States is strong enough to endure any slowdown in other countries and a tighter monetary policy.
Last week, the Department of Labor reported that the U.S. economy added 321,000 jobs last month, the highest gain in almost three years. The unemployment rate remained at 5.8%, the lowest in six years.
- Dow Jones Industrial Average (DJIA) – 17,855.56 (-0.57%)
- S&P 500- 2,060.61 (-0.71%)
- NASDAQ- 4,740.69 (-0.84%)
- Russell 2000- 1,168.13 (-1.21%)
- EURO STOXX 50 Price EUR- 3,247.99 (-0.90%)
- FTSE 100 Index- 6,672.15 (-1.05%)
- Deutsche Borse AG German Stock Index DAX- 10,014.99 (-0.72%)
- Nikkei 225- 17,935.64 (+0.08%)
- Hong Kong Hang Seng Index- 24,047.67 (+0.19%)
- Shanghai Shenzhen CSI 300 Index- 3,252.88 (+4.10%)
Stocks in Focus
Apple Inc. (NASDAQ:AAPL) declined more than 2% to $112.40 per share despite the bullish report from BMO Capital Markets. The stock was impacted by a report from Parks Associates that Chromecast from Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) surpassed the sales of Apple TV streaming box.
The stock price of Chevron Corporation (NYSE:CVX) dropped nearly 4% to $106.72 per share. Analysts at Oppenheimer reduced their price target for the stock from $140 to $130 per share.
The shares of ConocoPhillips (NYSE:COP) declined more than 4% to $65.03 per share after the company reduced its capex for 2015 by 20%. The company still expects a 3% productions growth next year. ConocoPhillips Chairman and CEo Ryan Lance said the company’s lower capex for 2015 demonstrate their focus on cash flow neutrality and competitive dividend.
Exxon Mobil Corporation (NYSE:XOM) fell more than 2% to $91.7o per share. Over the past 52-weeks, the shares of Exxon Mobil traded from its highest level of $104.76 to as low as $86.91 per share. The stock lost more than 9% of its value year-to-date.