U.S. stocks veered lower in morning trading Monday, shedding some of the gains from earlier in the day. Energy companies were among the biggest decliners as the price of crude oil fell. Investors were also weighing the latest market drop in China.
KEEPING SCORE: The Dow Jones industrial average fell nine points, or 0.1 percent, to 16,336 as of 11:23 a.m. Eastern time. The S&P 500 index shed four points, or 0.2 percent, to 1,917. The Nasdaq composite lost 24 points, or 0.5 percent, to 4,618. The market losses come after U.S. stocks posted their worst week in more than four years.
THE QUOTE: “Investors have one eye on China, and all that’s going on there, and the other eye on oil,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank. “Those two things are keeping investors on pins and needles right now.”
ENERGY: Benchmark U.S. crude shed $1.44, or 4.3 percent, to $31.72 a barrel in New York. Brent crude, a benchmark for international oils, fell $1.63, or 4.8 percent, to $32.30 a barrel in London.
OIL DRAG: Several energy and mining companies slumped as crude oil and other commodity prices fell. Freeport-McMoRan sank $1.03, or 19 percent, to $4.38, making it the biggest decliner in the S&P 500 index. Consol Energy also slumped, losing 78 cents, or 10.1 percent, to $6.91. Marathon Oil shed 79 cents, or 7.7 percent, to $9.56.
DONE DEAL: Irish drugmaker Shire announced its long-rumored agreement to buy U.S.-based rival Baxalta for about $32 billion in cash and stock. The boards of both companies have agreed to the deal, and they expect it to close in the middle of the year. Shire slid $2.95, or 6.9 percent, to $39.82. Baxalta fell 66 cents, or 1.6 percent, to $39.35.
HEALTHY OUTLOOK: HCA Holdings jumped 6.3 percent early Monday after the hospital operator raised its profit forecast. The stock added $4.03 to $68.30. Tenet Healthcare also rose, climbing 90 cents, or 3.6 percent, to $26.24. Both companies were among the biggest gainers in the S&P 500 index.
SECTOR VIEW: Seven of the 10 sectors in the S&P 500 index moved lower, with materials stocks falling the most. Utilities stocks led the gainers.
ROUGH WEEK: U.S. stocks are coming off their worst-ever opening week of a year and the biggest weekly slide since September 2011. The slump came as a weakening of China’s currency and steep drops in its stock market stoked worries over the outlook for the world’s second-largest economy.
OVERSEAS: European markets were down. Germany’s DAX slipped 0.2 percent, while the CAC-40 in France lost 0.4 percent. The FTSE 100 index of leading British shares slid 0.7 percent. In Asia, Chinese stocks sank again after a rebound Friday that analysts suggested was due to buying from a group of state entities dubbed the “National Team.” The Shanghai Composite Index fell 5.3 percent and Hong Kong’s Hang Seng sank 2.8 percent. Sydney’s S&P/ASX 200 lost 1.2 percent, while Seoul’s Kospi fell 1.2 percent. Tokyo’s markets were closed for a holiday.
BONDS AND CURRENCIES: Bond prices fell. The yield on the 10-year Treasury note rose to 2.15 percent from 2.12 percent late Friday. The euro fell to $1.0888 from $1.0903 and the dollar was little changed at 117.34 yen compared with 117.67 yen late Friday.
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