The equity markets in the United States decline primarily due to the slump in energy prices, which dragged down the stock prices of energy and raw materials companies.
The WTI Crude oil declined 5.73% to $37.68 per barrel, and the Brent Crude oil dropped 5.28% to $40.73 per barrel.
The price of oil fell more than 40% over the past year, which was one of the factors hindering the economic growth in Europe and the United States. The capital spending weakened, and the inflation rate remained below the targets of the central banks.
In an interview with Bloomberg, Kevin Caron, a market strategist and portfolio manager at Stifel Nicolaus & Co. commented, “Equity markets have basically treaded water this year as economic data has been fairly weak, particularly as it relates to the global scene.”
Caron added that the markets is still facing a slow growth globally, which he believes will remain a challenge as the Federal Reserve is set to start raising interest rates.
Traders believed that there is a 78% chance for a December rate hike by the Federal Reserve.
Stephen Carl, the principal and head equity trader at Williams Capital, said, “Weak oil is the story today. The lack of economic numbers today is compounding the effect of energy losses. The Fed rate hike is imminent, and people are trying to square up heading into the year-end.”
- Dow Jones Industrial Average (DJIA) – 17, 731.45 (-0.6%)
- S&P 500- 2,077.12 (-0.70%)
- NASDAQ- 5,101.81 (-0.79%)
- Russell 2000- 1,163.63 (-1.67%)
- EURO STOXX 50 Price EUR- 3,360.21 (-0.88%)
- FTSE 100 Index- 6,223.2 (-0.24%)
- Deutsche Borse AG German Stock Index DAX- 10,886.09 (+1.25%)
- Nikkei 225- 19,698.15 (+0.99%)
- Hong Kong Hang Seng Index- 22,203.22 (-0.15%)
- Shanghai Shenzhen CSI 300 Index- 3,687.61 (+0.27%)
Stocks in Focus
The stock price of Consol Energy declined more than 15% to $6.55 per share. The company is one of the biggest losers today due to the decline in oil prices. The StreetRatings team issued a Sell recommendation on the stock based on its weaknesses in different areas including a disappointing return on equity and stock performance, weak operating cash flow, and high debt management risk.
Staples lost almost 14% in stock value to $10.66 per share today. The stock was negatively impacted by the decision of the Federal Trade Commission (FTC) to block its proposed merger with Office Depot.
United States Steel Corporation fell more than 8% to $7.09 per share. The price of iron ore fell below $40 per metric ton. The company recently announced its decision to restructure ts North American Falt-Rolled operations.