By Rodrigo Campos
U.S. stocks fell on Tuesday as oil prices dropped to their lowest since November and airlines pulled industrial stocks lower.Health sector shares were volatile as traders digested a nonpartisan research report that showed 14 million Americans would lose medical insurance by next year under the Republican plan to dismantle the Obamacare healthcare reform.Trading volumes were light ahead of a Federal Reserve statement due Wednesday in which the U.S. central bank is expected to raise rates by 25 basis points.Airline stocks slipped as a blizzard swept through the heavily populated northeastern United States, grounding thousands of flights. United Continental (UAL.N) fell 4.7 percent to $66.55 while Southwest Airlines (LUV.N) dropped 3.1 percent and American Airlines (AAL.O) lost 2.8 percent.
Oil prices slid to three-month lows after OPEC reported a rise in global crude inventories and a surprise jump in production from its biggest member, Saudi Arabia, while it raised its forecast of production in 2017 from outside the group, suggesting complications in an effort to clear a glut and support prices. The S&P energy sector .SPNY was down 1.0 percent and was on track to close at its lowest since Nov. 4. Chevron (CVX.N) was off 1.6 percent and was the biggest drag on the Dow and the S&P 500.“None of the data you’re getting is good if you’re trying to increase (crude) prices, it doesn’t look like oil supply is diminishing,” said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.
She said energy sector earnings have little upside potential so their stocks’ underperformance is to be expected.The Dow Jones Industrial Average .DJI fell 39.26 points, or 0.19 percent, to 20,842.22, the S&P 500 .SPX lost 8.28 points, or 0.35 percent, to 2,365.19 and the Nasdaq Composite .IXIC dropped 19.43 points, or 0.33 percent, to 5,856.35.
Valeant (VRX.N) plunged 12.3 percent to $10.63 after billionaire investor William Ackman said his hedge fund, Pershing Square Capital, sold its entire stake in the company.Declining issues outnumbered advancing ones on the NYSE by a 2.05-to-1 ratio; on Nasdaq, a 1.97-to-1 ratio favoured decliners.The S&P 500 posted 14 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 54 new highs and 58 new lows. (Reporting by Rodrigo Campos)
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Updated Date: Mar 15, 2017 01:45 AM