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09/13/2016

Stocks tumble as weaker forecast sends oil prices lower

This Oct. 4, 2014, file photo, shows the facade of the New York Stock Exchange. An easing in U.S. rate hike expectations following a speech by one of the Federal Reserve's policymakers helped shore up stock markets around the world on Tuesday, Sept. 13, 2016. Oil prices took a pounding after a leading industry group reduced its global oil demand forecasts.

This Oct. 4, 2014, file photo, shows the facade of the New York Stock Exchange. An easing in U.S. rate hike expectations following a speech by one of the Federal Reserve's policymakers helped shore up stock markets around the world on Tuesday, Sept. 13, 2016. Oil prices took a pounding after a leading industry group reduced its global oil demand forecasts.

 

U.S. stocks are skidding Tuesday after the International Energy Agency said it expects slower growth in demand for oil this year. That's pushing the price of oil down and sending energy companies lower. Banks and phone companies are also falling.

 

KEEPING SCORE: The Dow Jones industrial average gave up 243 points, or 1.3 per cent, to 18,149 as of noon Eastern time. The Standard & Poor's 500 index fell 32 points, or 1.5 per cent, to 2,126. The Nasdaq composite lost 66 points, or 1.3 per cent, to 5,145. After two months of quiet trading, stocks are on track for their third big move in a row, after a big drop Friday and a rally on Monday.

 

OIL: Crude prices fell Tuesday after the Paris-based International Energy Agency said it believes global demand for oil will grow by 1.3 million barrels a day in 2016. That's 100,000 barrels below the previous forecast. The biggest reason for the change is a more pronounced economic slowdown during the third quarter of the year.

 

Slower economic growth has been a major worry for investors this year. It was a big reason stocks tumbled in January and early February. The price of oil has plunged over the last two years as an enormous supply glut built up while growth in demand slowed.

 

U.S. crude fell $1.26, or 2.7 per cent, to $45.03 a barrel in New York. Brent crude, the benchmark for international oil prices, slid $1.02, or 2.1 per cent, to $47.30 a barrel in London.

 

Exxon Mobil sank $1.96, or 2.2 per cent, to $85.33 while Chevron shed $2.28, or 2.2 per cent, to $99.97 and Marathon Oil stumbled $1.10, or 7.1 per cent, to $14.38.

 

GOING DEEP: Anadarko Petroleum agreed to pay $2 billion to buy Freeport-McMoRan's deepwater assets in the Gulf of Mexico assets. The move comes a little more than a year after activist investor Carl Icahn disclosed that he bought a stake in Freeport-McMoRan. Two directors backed by Icahn are now on the company's board, and he has pushed Freeport-McMoRan to spin off its oil and gas business so it can focus on copper mining. Anadarko stock sank 63 cents, or 1.1 per cent, to $57.16 and Freeport-McMoRan fell $1.08, or 9.7 per cent, to $10.

 

CHIP CHIP, HOORAY: Among the few gainers early Tuesday was chipmaker Intersil, which agreed to be bought by Renesas of Japan. Renesas' offer values Intersil at $22.50 per share, or $3.05 billion. Intersil climbed $1.99, or 10.1 per cent, to $21.75.

 

SLIMMING DOWN: Weight Watchers International slumped 76 cents, or 7.3 per cent, to $9.60 after the weight loss company said CEO James Chambers will step down at the end of the month. Chambers has been its CEO since 2013. Weight Watchers more than doubled after the company announced an alliance with Oprah Winfrey, who has touted the company's products, bought a 10 per cent stake, and joined the board of directors. But the stock has given up some of its gains lately. Weight Watchers said Winfrey will be part of the committee that names its next CEO.

 

READY TO LINE UP? Apple was one of the few stocks that traded higher Tuesday. It rose $2.53, or 2.5 per cent, to $108.09 after T-Mobile said preorders for Apple's newest iPhones, introduced last week, are the strongest it has seen so far.

 

BONDS, CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.72 per cent from 1.67 per cent. The dollar rose to 102.22 yen from 101.84 yen. The euro remained at $1.1241.

 

OVERSEAS: Germany's DAX lost 0.3 per cent while France's CAC-40 slipped 1 per cent. The FTSE 100 index of leading British shares was down 0.3 per cent. Asian stocks mostly rallied. In Japan the Nikkei 225 gained 0.3 per cent and South Korea's Kospi rose 0.4 per cent. However, the Hang Seng index in Hong Kong lost 0.3 per cent.



    Editor:Albert | Source: The Associated Press


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