The stock markets in the United States ended the trading session with mixed results as oil prices continue to decline. The NASDAQ and the Russell 2000 dropped while the DJIA and S&P 500 gained.
Last week, the U.S. equity markets suffered a selloff, which was primarily caused by the turmoil in China’s main stock market amid increasing concerns about the country’s slowing economic growth.
Today, the WTI crude dropped 5.82% to $31.23 per barrel, and the Brent crude fell 6.68% to $31.31 a barrel. The current crude oil prices were the lowest over the past 12 years. Morgan Stanley speculated that Brent crude oil will likely decline to as low as $20 per barrel due to the rapid gain of the U.S. dollar.
Michael Lynch, president of Strategic Energy & Economic Research, told Bloomberg, “I’m not convinced that Brent is likely to go to $20 because of the stronger dollar, but it’s certainly a realistic possibility.” Lynch added that they wanted to see a sign that China already reached the bottom.
On the other hand, Bob Yawger, director of the futures division at Mizuho Securities, said, “The hedge funds are saying that this isn’t a good time to try and find a bottom in the oil market.”
Meanwhile, Jason Schenker, president of Prestige Economics LLC, said, Concern about global economic sentiment and dollar strength are continuing to weigh on the market.”
Investors will be focusing their attention on the fourth-quarter earnings reports by companies. Alcoa unofficially kicks off the earnings season reporting after the market closes today.
- Dow Jones Industrial Average (DJIA) – 16, 398.57 (+0.32 %)
- S&P 500- 1,923.67 (+0.09%)
- NASDAQ- 4,637.99 (-0.12%)
- Russell 2000- 1,041.90 (-0.41%)
- EURO STOXX 50 Price EUR- 3,027.49 (-0.20%)
- FTSE 100 Index- 5,871.83 (-0.69%)
- Deutsche Borse AG German Stock Index DAX- 9,825.07 (-0.25%)
- Nikkei 225- 17,697.96 (-0.39%)
- Hong Kong Hang Seng Index- 19,888.50 (-0.76%)
- Shanghai Shenzhen CSI 300 Index- 3,192.45 (-5.03%)
Stocks in Focus
The stock price of Alcoa closed $7.99 per share, down by nearly 1%. However, the shares of the company climbed 1.38% to $8.10 per share during the extended trading around 4:13 in the afternoon in New York. Alcoa reported a net loss of $500 million or $0.39 per share and $5.2 billion in revenue, down 18%.
Macy’s gained more than 8% to $38.80 per share. Starboard Value urged the company to consider spinning off its real estate holdings, which have a value of approximately $21 billion. Starboard Value CEO Jeffrey Smith suggested a spinoff of Macy’s highest profile locations into on joint venture, and to separate its mall-based properties into a second joint venture. Smith believes that the strategy would create “meaningful and lasting value for shareholders.”
The stock value of Kohl’s Corporation increased more than 4% to $50.08 per share. The company was reportedly considering going breaking up its business operations or going private.