U.S. stocks are skidding Tuesday after the International Energy Agency said it expects slower growth in demand for oil this year. That’s pushing the price of oil down and sending energy companies lower. Banks and phone companies are also falling.
KEEPING SCORE: The Dow Jones industrial average gave up 243 points, or 1.3 percent, to 18,149 as of noon Eastern time. The Standard & Poor’s 500 index fell 32 points, or 1.5 percent, to 2,126. The Nasdaq composite lost 66 points, or 1.3 percent, to 5,145. After two months of quiet trading, stocks are on track for their third big move in a row, after a big drop Friday and a rally on Monday.
OIL: Crude prices fell Tuesday after the Paris-based International Energy Agency said it believes global demand for oil will grow by 1.3 million barrels a day in 2016. That’s 100,000 barrels below the previous forecast. The biggest reason for the change is a more pronounced economic slowdown during the third quarter of the year.
Slower economic growth has been a major worry for investors this year. It was a big reason stocks tumbled in January and early February. The price of oil has plunged over the last two years as an enormous supply glut built up while growth in demand slowed.
U.S. crude fell $1.26, or 2.7 percent, to $45.03 a barrel in New York. Brent crude, the benchmark for international oil prices, slid $1.02, or 2.1 percent, to $47.30 a barrel in London.
Exxon Mobil sank $1.96, or 2.2 percent, to $85.33 while Chevron shed $2.28, or 2.2 percent, to $99.97 and Marathon Oil stumbled $1.10, or 7.1 percent, to $14.38.
GOING DEEP: Anadarko Petroleum agreed to pay $2 billion to buy Freeport-McMoRan’s deepwater assets in the Gulf of Mexico assets. The move comes a little more than a year after activist investor Carl Icahn disclosed that he bought a stake in Freeport-McMoRan. Two directors backed by Icahn are now on the company’s board, and he has pushed Freeport-McMoRan to spin off its oil and gas business so it can focus on copper mining. Anadarko stock sank 63 cents, or 1.1 percent, to $57.16 and Freeport-McMoRan fell $1.08, or 9.7 percent, to $10.
CHIP CHIP, HOORAY: Among the few gainers early Tuesday was chipmaker Intersil, which agreed to be bought by Renesas of Japan. Renesas’ offer values Intersil at $22.50 per share, or $3.05 billion. Intersil climbed $1.99, or 10.1 percent, to $21.75.
SLIMMING DOWN: Weight Watchers International slumped 76 cents, or 7.3 percent, to $9.60 after the weight loss company said CEO James Chambers will step down at the end of the month. Chambers has been its CEO since 2013. Weight Watchers more than doubled after the company announced an alliance with Oprah Winfrey, who has touted the company’s products, bought a 10 percent stake, and joined the board of directors. But the stock has given up some of its gains lately. Weight Watchers said Winfrey will be part of the committee that names its next CEO.
READY TO LINE UP? Apple was one of the few stocks that traded higher Tuesday. It rose $2.53, or 2.5 percent, to $108.09 after T-Mobile said preorders for Apple’s newest iPhones, introduced last week, are the strongest it has seen so far.
BONDS, CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.72 percent from 1.67 percent. The dollar rose to 102.22 yen from 101.84 yen. The euro remained at $1.1241.
OVERSEAS: Germany’s DAX lost 0.3 percent while France’s CAC-40 slipped 1 percent. The FTSE 100 index of leading British shares was down 0.3 percent. Asian stocks mostly rallied. In Japan the Nikkei 225 gained 0.3 percent and South Korea’s Kospi rose 0.4 percent. However, the Hang Seng index in Hong Kong lost 0.3 percent.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info