Financial Markets: U.S. stocks slip again as oil skids six percent
NEW YORK >> U.S. stocks fell Monday after a rally late last week as the beleaguered energy sector took another blow from falling oil prices.
Chevron and Exxon Mobil each fell 3 percent Monday, among the biggest losses in the Dow Jones industrial average.
The price of crude oil dropped nearly 6 percent to $30 a barrel in New York.
Plunging oil prices have been decimating profits at energy companies and getting investors worried that the global economy is slowing down.
The Dow average slumped 208 points, or 1.3 percent, to 15,885.
The Standard & Poor's 500 index lost 29 points, or 1.6 percent, to 1,877. The Nasdaq composite gave up 72 points, or 1.6 percent, to 4,518.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.01 percent.
Friday was the best day for the S&P 500 since early December and the best day for the Nasdaq composite index since September. That helped stocks make their first weekly gain in the last four. This January has been one of the worst for the Dow and the S&P 500 in history. The Nasdaq composite is down almost 11 percent this month.
Energy prices dip
The price of benchmark U.S. crude fell $1.85, or 5.7 percent, to $30.34 a barrel in New York, and Brent crude, a benchmark for international oils, lost $1.68, or 5.2 percent, to $30.50 a barrel in London. U.S. oil jumped 9 percent Friday after setting 12-year lows earlier in the week.
Exxon Mobil lost $1.53, or 2 percent, to $75.04 and Chesapeake Energy lost 42 cents, or 12 percent, to $3.09.
Paper and packaging companies fell on concerns about product prices. WestRock shares gave up $4.96, or 13.1 percent, to $32.78. Packaging Corp. lost $.83, or 11.8 percent, to $50.83 and International Paper fell $3.73, or 10.2 percent, to $32.72.
Mark Wilde, managing director BMO Capital Markets, said stocks in that sector are falling because an influential trade publication estimated that prices for containerboard, an important product, fell sharply in January.
"I think it confirms people's fears," Wilde said. "Falling prices are going to mean lower earnings."
Tyco International and Johnson Controls said they will combine. Tyco makes fire suppression systems and Johnson Controls makes ventilation systems, auto seating and car batteries. Both stocks have struggled as investors worried about their growth.
Based on current values the combined company will have a value of about $36 billon. Shares of Tyco jumped $3.40, or 11.1 percent, to $33.99, the biggest gain on the S&P 500. Johnson Controls lost 95 cents, or 2.7 percent, to $34.65.
Companies spent a record $5 trillion on acquisitions and other deals last year. That was almost 40 percent more than they spent in 2014. While few deals have been announced in the first weeks of 2016, business technology company Intralinks expects companies will strike more deals in the first half of this year.
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