Financial Markets: U.S. crude plunges to lowest level in seven years
NEW YORK — Energy companies closed sharply lower on Monday, leading a broad decline on the stock market, after the price of oil dropped to its lowest point in nearly seven years.
U.S. crude plunged almost 6 percent to close below $38 a barrel Monday. That's the lowest level since February 2009, at the height of the financial crisis.
Exxon Mobil and Chevron each fell 3 percent, the biggest declines in the Dow Jones industrial average.
Airline stocks rose on the prospect of lower fuel costs. Delta Air Lines and JetBlue Airways each rose 4 percent.
The Dow gave up 117 points, or 0.7 percent, to 17,730.
The Standard & Poor's 500 index fell 14 points, or 0.7 percent, to 2,077. The Nasdaq composite dropped 40 points, or 0.8 percent, to 5,101.
Oil drillers and other energy companies are falling sharply as benchmark U.S. crude continues its 1 1/2 year tumble. U.S. crude fell $2.32, or 6 percent, to close at $37.65 a barrel on the New York Mercantile Exchange, its lowest price since February 2009. Natural gas prices also fell. Among energy stocks, Consol Energy plunged $1.20, or 15 percent, to $6.52 and Chesapeake Energy lost 35 cents, or 8 percent, to $4.19.
"No one in the energy patch is willing to support the price (of oil) and, if they aren't willing, the price will keep dropping," said Mizuho Securities Chief Economist Steven Ricchiuto. "The whole world is facing excess supply as the global economy slows."
Airline stocks rose sharply as investors anticipated that lower fuel costs would help the companies fatten their profit margins. JetBlue Airways jumped $1.03, or 4 percent, to $26.51. Delta Air Lines gained $1.43, or 2.9 percent, to $51.20.
Chipotle Mexican Grill dropped $17.91, or 3 percent, to $543.29. The restaurant chain warned late Friday that an outbreak of E. coli linked to its restaurants sent sales plummeting by as much as 22 percent in recent weeks.
Keurig Green Mountain soared 74 percent after agreeing to be acquired by a private equity firm. The stock jumped $38.32 to $90.02.
Office Depot plunged 16 percent after regulators said they would try to block a proposed purchase of it by rival Staples for $6.3 billion. Office Depot dropped $1.04 to $5.59. Staples fell $1.58, or nearly 13 percent, to $10.78.
Stocks of gun makers are soaring on the prospect of big sales amid a push for greater gun control following the San Bernardino shootings. Smith & Wesson Holding added $1.27, or nearly 7 percent, to $20.26.
The CAC-40 in France was 0.9 percent higher while Germany's DAX rose 1.2 percent. Britain's FTSE 100 fell 0.2 percent.
Much focus this week will fall on China, the world's No. 2 economy, as investor continue to worry about slowing growth in the world's No. 2 economy. Trade data are due on Tuesday, inflation on Wednesday and retail sales, industrial production and fixed asset investment on Saturday.
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