By Saumya Vaishampayan
U.S. stock futures traded little changed Friday after OPEC's
decision to maintain its production target sent oil prices
tumbling.
In premarket trade, shares of companies tied to the oil industry
fell, while companies that benefit from lower oil prices, such as
airlines, saw shares rise.
Dow Jones Industrial Average futures were flat at 17810 and
S&P 500 futures declined two points, or 0.1%, to 2070.
Nasdaq-100 futures added 10 points, or 0.2%, to 4327. Changes in
stock futures don't always accurately predict moves in the stock
market after the opening bell.
The U.S. stock market was closed Thursday for Thanksgiving. On
Friday, it will close earlier than usual at 1 p.m. Eastern
time.
The Organization of the Petroleum Exporting Countries on
Thursday decided to stick to its current target of producing 30
million barrels of oil a day, rejecting calls to cut output amid a
steep slump in oil prices. The decision was accompanied by a
commitment from OPEC members to comply with it. That implies a cut
of around 300,000 barrels a day, based on OPEC's figures, since the
12-member cartel currently pumps more than its production ceiling.
But that's a relatively small change in global oil supply.
On the New York Mercantile Exchange, crude-oil futures dropped
6.1% to $69.18 a barrel. The Nymex floor was closed on Thursday in
observance of the Thanksgiving holiday, though electronic trading
took place.
U.S. stocks have more than recovered from a pullback in
September and October that was sparked in part by the drop in oil
prices and concerns about the pace of global growth. The Dow closed
at its 30th record on Wednesday, while the S&P notched its 47th
closing high. Gains in recent weeks have been fueled by improving
U.S. economic data and the third-quarter earnings season, which was
broadly upbeat.
Many investors say falling oil prices will benefit U.S.
consumers, who will begin spending more and help boost the U.S.
economy.
"Overall, it is a net positive for the U.S., [because] we are a
consumer-led economy," said Quincy Krosby, market strategist for
Prudential Financial.
Companies tied to the oil industry saw their shares tumble in
premarket trade. Oil-and-gas producer Chesapeake Energy Corp.
shares fell 7.9% and offshore driller Transocean Ltd. shares
declined 7.4%, marking the biggest losses on the S&P 500 in
premarket trade.
Chevron Corp. shares slumped 4% premarket and those of Exxon
Mobil Corp. lost 3.8%, leading declines on the Dow industrials.
The OPEC decision and lower oil prices could lead to more deal
activity in the energy sector, said Ms. Krosby of Prudential
Financial.
Shares of Delta Air Lines Inc. and Southwest Airlines Co., which
stand to benefit from lower oil prices, rose the most on the
S&P 500 in premarket trade.
In other commodity markets, gold futures fell 1% to $1185.20 an
ounce.
Demand for government debt increased, sending the yield on the
10-year Treasury note down to 2.204%. Yields fall as prices
rise.
European stocks fell, with the Stoxx Europe 600 down 0.4%. Data
released Friday showed the eurozone's annual rate of inflation in
November fell further below the European Central Bank's target of
just under 2%.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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