Wall Street hit by Saudi attacks; energy stocks temper losses

By Medha Singh and Ambar Warrick (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

Reuters September 17, 2019 00:05:37 IST
Wall Street hit by Saudi attacks; energy stocks temper losses

Wall Street hit by Saudi attacks energy stocks temper losses

By Medha Singh and Ambar Warrick

(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.

The S&P 500 energy, 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, Marathon Oil Corp and Hess Corp 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 shedding 2.20% while Carnival Corp fell 2.8%.

Retail stocks 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.

Shares of defense companies Raytheon, Lockheed Martin Corp, Northrop Grumman Corp rose at least 2%. J.P. Morgan upgraded Raytheon shares to "overweight".

At 12:57 p.m. ET, the Dow Jones Industrial Average was down 151.30 points, or 0.56%, at 27,068.22, the S&P 500 was down 12.58 points, or 0.42%, at 2,994.81. The Nasdaq Composite 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 down from their multi-week highs, sending the interest-rate sensitive bank sub-sector 0.72% lower.

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 about 1% below its record high.

Among other movers, General Motors Co 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)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.