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Oil prices sink again as post-election stock surge fades

Oil prices sink again as post-election stock surge fades

November 9th, 2018 in Business

Traders Eric Schumacher, left, and Richard Deviccaro work on the floor of the New York Stock Exchange, Thursday, Nov. 8, 2018. Stocks are opening modestly lower on Wall Street as the market gives back some of its big gains from the day before. (AP Photo/Richard Drew)

NEW YORK (AP) — Stocks in the U.S. slipped Thursday as the ninth consecutive drop in crude oil prices hurt energy companies. U.S. markets were coming off huge gains the day before.

U.S. crude oil has now slumped more than 20 percent since early October, meeting Wall Street’s definition of a “bear market.”

Government fuel stockpiles have steadily expanded, pushing supplies higher, and the U.S. issued waivers to a number of countries that buy oil from Iran. That allows those countries to keep importing Iranian oil in spite of renewed sanctions on that country.

Most other groups of stocks finished little changed. Banks made the largest gains. The Federal Reserve left interest rates where they are, but suggested it plans to keep raising rates in response to the strong U.S. economy.

After its steep plunge in October, the S&P had risen for six of the seven days ending on Wednesday. Stocks started sinking last month because investors worried that the Fed was going to raise interest rates to the point they slowed down economic growth. But John Lynch, chief investment strategist at LPL Research, said he doesn’t think that’s going to happen and that the Fed will stop raising rates in 2019.

“We do not believe they will be as aggressive as many fear,” he said. “We still don’t have anything approaching the wage pressures that have historically scared the Fed.”

The S&P 500 index shed 7.06 points, or 0.3 percent, to 2,806.83 after it jumped 2.1 percent Wednesday. The Dow Jones Industrial Average inched up 10.92 points to 26,191.22.

The Nasdaq composite dipped 39.87 points, or 0.5 percent, to 7,530.88 after a 2.6 percent surge a day earlier. The Russell 200 index of smaller-company stocks fell 3.95 points, or 0.2 percent, to 1,578.21.

Benchmark U.S. crude oil fell 1.6 percent to $60.67 a barrel in New York. On Oct. 3 it closed at $76.41, the highest level in almost four years.

Brent crude lost 2 percent to $70.65 a barrel in London. Brent crude is the standard for international oil prices and it has also fallen sharply over the last five weeks.

Exxon Mobil fell 1.6 percent to $81.71 and ConocoPhillips gave up 4.5 percent to $119.36.

Bond prices edged lower. The yield on the 10-year Treasury note rose to 3.24 percent, near its highest level this year, from 3.23 percent. The Federal Reserve left interest rates where they are, but suggested it plans to keep raising them in response to the strong U.S. economy.