Reuters - Economic News

Indexes drop more than 1 percent; energy shares resume slide

Traders work on the floor of the New York Stock Exchange December 10, 2014. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange December 10, 2014.

Credit: Reuters/Brendan McDermid

(Reuters) – U.S. stocks extended their declines on Wednesday afternoon, with all three major indexes down more than 1 percent each as the energy sector resumed its recent slide along with oil prices.

Selling picked up in early afternoon, with declining issues outnumbering advancing ones on the NYSE by 2,450 to 613, for a 4.00-to-1 ratio. The number of NYSE stocks making new 52-week lows was 241, compared with just 111 making new highs.

The S&P energy index .SPNY was down 3.3 percent and led declines on the S&P 500, but all 10 S&P sector were down on the day, with most falling more than 1 percent. The S&P materials sector .SPLRCMA was down 2.1 percent.

Energy was on track for its fourth drop in five sessions. Brent crude LCOc1 touched a new five-year low of $ 63.56 on signs of oversupply and soft demand. Exxon Mobil (XOM.N), down 3.3 percent, led declines on the S&P 500.

Falling oil prices have raised concerns about earnings for energy companies, with year-end tax selling putting additional pressure on the group. The sector, down more than 15 percent for the year so far, is the worst performing of the 10 major S&P sectors for the year.

“We’ve seen a little bit of weakening in the equity market structurally, so it seems like it’s been a little bit on a knife’s edge. I think the market is stretched at the moment and we’ve had this oil issue lingering over the market and what it means for … global demand,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The S&P 500 is down 2.2 percent for the week so far, though it is up about 9 percent from its Oct. 15 low.

At 2:39 p.m. the Dow Jones industrial average .DJI fell 261.24 points, or 1.47 percent, to 17,539.96, the S&P 500 .SPX lost 31.12 points, or 1.51 percent, to 2,028.7 and the Nasdaq Composite .IXIC dropped 72.56 points, or 1.52 percent, to 4,693.90.

Shares of Yum Brands Inc (YUM.N) dropped 5.5 percent a day after it lowered its profit forecast for the year for the second time, hurt by slower-than-expected sales recovery in China following a food safety scare in July.

Among the day’s gainers were airline shares, including Southwest Airlines (LUV.N), up 3.1 percent and was leading gains on the S&P 500. Barclays said airlines stand to see a decline of about $ 10 billion in fuel costs in 2015.

(Additional reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)

Reuters: Economic News

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