Dow Retreats After Flirting With 20000
10 January 2017 - 8:40AM
Dow Jones News
By Gunjan Banerji and Mike Bird
The S&P 500 fell Monday, led by declines in energy shares as
oil prices slumped.
Renewed concerns about a glut of crude sent U.S. oil prices down
3.8% -- their biggest daily drop since November -- and weighed on a
sector of the stock market that was a top performer last year.
Declines in Exxon Mobil and Chevron pressured the Dow Jones
Industrial Average, sending the blue-chip index farther from the
elusive 20000 mark after it got closer than ever before on Friday.
The Dow industrials have risen nearly 9% since Election Day,
largely on expectations of higher growth under President-elect
Donald Trump.
Some investors and analysts expect volatility, which was
relatively low the first week of the year, to pick up in coming
months when details on Mr. Trump's policies become clearer.
"We need a breather in here," said Michael Mullaney, director of
global markets research at Boston Partners. "We are well overdue
for some kind of a pullback. That's what we're seeing right
now."
Investors who have logged short-term gains are likely taking
some money off the table, Mr. Mullaney said, adding that such a
retreat is healthy for the market.
The Dow Jones Industrial Average fell 76 points, or 0.4%, to
19887 on Monday. The S&P 500 declined 0.4% and the Nasdaq
Composite edged up 0.2% on gains in tech and biotechnology
shares.
Nvidia, the best-performing stock in the S&P 500 last year,
was one of Monday's top performers. Shares rose 4.1%.
Energy companies in the S&P 500 lost 1.5%, knocking a sector
that was the best performer out of 11 last year with a 24% gain.
Southwestern Energy shed 4.9% Monday, Range Resources lost 4.3% and
Devon Energy fell 4.3%.
The declines came as U.S. crude for February delivery fell to
$51.96 a barrel, its lowest settlement since Dec. 16 and its
biggest one-day percentage decline since Nov. 29. Some analysts and
brokers said signs of steadily high supply coming out of Iraq and
Iran were undermining faith in a deal to cut supply from the
Organization of the Petroleum Exporting Countries and other global
exporters.
Elsewhere, the Stoxx Europe 600 fell 0.5% on declines in the
banking and energy sectors. The U.K.'s FTSE 100 was one of the few
European indexes in positive territory, rising 0.4% to notch its
eighth consecutive record close.
If the index closes at another record Tuesday, it would mark the
longest streak of records since 1987, according to the WSJ Market
Data Group.
The FTSE tends to benefit from a drop in the British pound,
which slumped Monday after U.K. Prime Minister Theresa May said
Britain would make a definitive break from the European Union. The
pound was recently down 1.1% against the U.S. dollar at
$1.2156.
Demand for havens helped U.S. government bond prices rise. The
yield on the 10-year U.S. Treasury note fell to 2.377% from 2.417%
Friday.
Hong Kong's Hang Seng rose 0.2% and the Shanghai Composite Index
added 0.5%. Japanese markets were closed for a public holiday.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com and Mike Bird
at Mike.Bird@wsj.com
(END) Dow Jones Newswires
January 09, 2017 16:25 ET (21:25 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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