Friday, 13 March 2015 21:24
NEW YORK: US stocks slumped on Friday, putting the S&P 500 on track for its third straight weekly decline, as a robust dollar threatened to erode the profits of multinationals and tumbling crude oil prices pressured energy shares.
Crude oil fell 3.7 percent to $ 45.29 a barrel, extending its losses throughout the morning, after the International Energy Agency said a global glut continued to build and US oil production showed no signs of slowing. The commodity has fallen in six of the past seven sessions and is down almost 60 percent from a June peak.
The S&P energy index fell 1.3 percent, among the biggest decliners of the 10 primary S&P 500 sectors. Chevron Corp fell 1.4 percent to $ 101.03 while Noble Corp sank 6.5 percent to $ 13.28.
“It’s a bit of a surprise that the US continues to produce at such a high level, and that amount of oil surplus continues to push the commodity lower,” said Michael Arone, chief investment strategist for State Street Global Advisors’ US Intermediary Business in Boston.
“I don’t expect oil will go much lower, but as it keeps falling, there are bigger concerns that we could see problems with respect to capital expenditures and employment in certain regions of the country.”
US consumer sentiment fell in March, dropping well below expectations, according to the University of Michigan’s preliminary monthly reading.
The US dollar index rose 0.6 percent and was set for its fourth straight weekly rise. Investors see the greenback’s continued strength as a threat to multinationals’ profits. Over the past 14 sessions, the S&P has had a correlation of -0.96 to the dollar index. Perfect inverse correlation is -1.0.
Investors were looking ahead to next week’s Federal Reserve meeting, which could provide further insight into when the first rate increase will come.
FXCM Inc jumped 20 percent to $ 2.59 in heavy trading a day after fourth-quarter earnings beat expectations. This was the currency broker’s first quarterly report since the removal of the cap on the Swiss franc sparked massive losses that pushed it to take a rescue loan.
Markets have been volatile this week, with the S&P posting both its biggest one-day gain since early February and its biggest one-day loss since early January.
The Dow is on track for a weekly drop of 1 percent while the Nasdaq is on track for a drop of 1.6 percent.
The S&P is down 1.3 percent on the week and is on track for its third straight weekly decline.
The Dow Jones industrial average fell 221.4 points, or 1.24 percent, to 17,673.82, the S&P 500 lost 21.01 points, or 1.02 percent, to 2,044.94 and the Nasdaq Composite dropped 46.08 points, or 0.94 percent, to 4,847.22. Declining issues outnumbered advancing ones on the NYSE by 2,418 to 537, for a 4.50-to-1 ratio; on the Nasdaq, 1,986 issues fell and 647 advanced for a 3.07-to-1 ratio favoring decliners.
The S&P 500 was posting 22 new 52-week highs and 24 new lows; the Nasdaq Composite was recording 96 new highs and 78 new lows.
Copyright Reuters, 2015
