Off The Wire
Wall Street hit by Saudi attacks; energy stocks temper losses
(Reuters) - U.S. stocks fell on Monday on global growth worries after weekend attacks on Saudi Arabia’s crude facilities hit 5% of the world’s supply, but a sharp surge in crude prices lifted beaten-down energy stocks and kept losses in check.
The attack on the world’s biggest oil exporter sent oil prices up more than 20% before they eased off their peaks as various nations said they would tap emergency reserves to ensure stable supplies. [O/R]
The S&P 500 energy .SPNY, one of the worst performing sectors so far this year, soared 3.15%, looking at its best one-day gain since Jan. 4. Shares of Apache Corp (APA.N), Marathon Oil Corp MRO.O and Hess Corp (HES.N) jumped between 10% and 13% and were the leading gainers on the benchmark index.
“The oil spike - higher prices globally - could slow world spending on items other than oil and that’s the main concern,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Market spotlight shifted to the drone attacks from this week’s centerpiece, the U.S. Federal Reserve’s two-day monetary policy meeting where expectations of a quarter point interest rate cut remain high.
Anticipation of higher fuel costs drove down shares of airlines and cruise line operators with the S&P 1500 airlines .SPCOMALI shedding 2.20% while Carnival Corp (CCL.N) fell 2.8%.
Retail stocks .SPXRT lost 1.38% and were among the biggest drags on the S&P 500.
“The drone strike in Saudi has had an impact on how investors are looking at the security and stability of the global energy supply chain and is fueling a degree of risk reassessment,” said Peter Kenny, founder of Kenny’s Commentary LLC and Strategic Board Solutions LLC in New York.
At 12:57 p.m. ET, the Dow Jones Industrial Average .DJI was down 151.30 points, or 0.56%, at 27,068.22, the S&P 500 .SPX was down 12.58 points, or 0.42%, at 2,994.81. The Nasdaq Composite .IXIC was down 32.63 points, or 0.40%, at 8,144.08.
Nine of the 11 major S&P sectors were trading lower.
Investors’ flight to safety pulled the U.S. benchmark 10-year Treasury bond yields US10YT=RR down from their multi-week highs, sending the interest-rate sensitive bank sub-sector .SPXBK 0.72% lower. [US/]
Wall Street's more than a decade-long rally continues to hinge on whether the Fed will keep cutting interest rates and on the progress in U.S.-China trade talks. The recent easing in trade tensions has brought the benchmark S&P 500 .SPX about 1% below its record high.
Among other movers, General Motors Co (GM.N) fell 4.1% after the United Auto Workers went on strike on Sunday, the first nationwide strike at GM in 12 years.
Advancing issues outnumbered decliners for a 1.09-to-1 ratio on the NYSE and a 1.18-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and one new low, while the Nasdaq recorded 41 new highs and 22 new lows.
Reporting by Medha Singh and Ambar Warrick in Bengaluru; Editing by Saumyadeb Chakrabarty, Arun Koyyur and Shounak Dasgupta