US stocks slip as falling oil prices punish energy companies

US stocks slip as falling oil prices punish energy companies

US stocks finished mostly lower on Monday as the price of oil continued to nosedive thanks to the strong dollar.

Energy companies took the biggest losses as US crude hovered around 40 dollars a barrel, its lowest price in almost four months, and materials companies also traded lower.

Every oil, gas and pipeline company on the Standard & Poor's 500 finished lower as a slump in the price of oil and other fuels extended into a third week.

The losses for energy and mining, chemical and building companies cancelled out gains for technology and health care companies.

A survey showed US manufacturing continued to grow in July, but did so at a slower pace than the month before. That, too, is linked to strength in the dollar.

"Manufacturing and oil have moved in lockstep for the better part of five years," said Steve Chiavarone, associated portfolio manager for Federated Investors.

The Dow Jones industrial average fell 27.73 points, or 0.2%, to 18,404.51. The S&P 500 lost 2.76 points, or 0.1%, to 2,170.84. The Nasdaq composite gained 22.06 points, or 0.4%, to 5,184.20.

The Nasdaq rose last week while the other major indexes fell. The Dow and S&P 500 set all-time highs recently and the Nasdaq is within 1% of the record it set in July 2015.

A survey by the Institute for Supply Management said US factories expanded for the fifth month in a row, although its survey reading was lower in July than it was in June and factory employment decreased.

A survey of manufacturing in Europe showed a similar result, and two surveys showed manufacturing activity in China was relatively weak in July.

The dollar has been gaining strength in over the last few years, and while it appeared to level off recently, it appears to be picking up again because investors are realising the Federal Reserve may raise interest rates later this year.

Mr Chiavarone said that is starting to hurt oil prices and slow down US manufacturing. When the dollar gets stronger, oil falls because it is priced in dollars.

Benchmark US crude lost 1.54 dollars, or 3.7%, to 40.06 dollars a barrel in New York, while Brent crude, which is used to price international oils, gave up 1.39 dollars, or 3.2%, to 42.14 dollars a barrel in London.

The price of oil has fallen 13% in a little more than two weeks and during the day it traded below 40 dollars a barrel for the first time since April 8.

Exxon Mobil fell 3.09 dollars, or 3.5%, to 86.85 dollars, its biggest loss since January. Chevron shed 3.37 dollars, or 3.3%, to 99.11 dollars.

Ionis Pharmaceuticals rose after it said a drug designed to treat spinal muscular atrophy in infants worked in a late-stage clinical study.

It also said drugmaker Biogen exercised an option to develop the drug globally and will pay Ionis 75 million dollars. Biogen plans to start seeking marketing approval for the drug, nusinersen, in the next few months.

Ionis surged 8.82 dollars, or 30.2%, to 38.01 dollars and Biogen gained 11.90 dollars, or 4.1%, to 301.83 dollars, more than any other S&P 500 stock.

Those moves helped pull healthcare stocks higher. Technology and consumer stocks also gained ground, and the S&P 500 consumer company and tech indexes reached annual highs.

Netflix rose 3.12 dollars, or 3.4%, to 94.37 dollars and Apple added 1.84 dollars, or 1.8%, to 106.05 dollars.

More in this Section

Traders mull extent of huge sterling rally, if Brexit deal were agreed   Traders mull extent of huge sterling rally, if Brexit deal were agreed

Bord na Móna seeking opportunities to redeploy 200 staffBord na Móna seeking opportunities to redeploy 200 staff

Spelling out all the ABCs of financial jargon in plain languageSpelling out all the ABCs of financial jargon in plain language

Amazon deal with Deliveroo investigated by UK competition watchdogAmazon deal with Deliveroo investigated by UK competition watchdog


Food news with Joe McNamee.The Menu: All the food news of the week

Though the Killarney tourism sector has been at it for the bones of 150 years or more, operating with an innate skill and efficiency that is compelling to observe, its food offering has tended to play it safe in the teeth of a largely conservative visiting clientele, top-heavy with ageing Americans.Restaurant Review: Mallarkey, Killarney

We know porridge is one of the best ways to start the day but being virtuous day in, day out can be boring.The Shape I'm In: Food blogger Indy Power

Timmy Creed is an actor and writer from Bishopstown in Cork.A Question of Taste: Timmy Creed

More From The Irish Examiner