Slump in oil weighs on equities in volatile session

Mon Jan 12, 2015 4:23pm EST
 
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By Ryan Vlastelica

NEW YORK (Reuters) - Most stock markets around the world fell on Monday as oil prices showed no sign of breaking their prolonged downward spiral, prompting further losses in beleaguered energy shares.

Losses were broad in the U.S. equity market, with nine of the 10 primary S&P 500 sectors ending lower. Energy .SPNY was by far the weakest group, off 2.8 percent. The sector is now down more than 25 percent from a high reached in July.

U.S. crude futures CLc1 slumped 5.2 percent to $45.87 per barrel, the lowest level since 2009, while Brent crude LCOc1 lost 5.6 percent as Goldman Sachs slashed its short-term price forecasts and Gulf producers showed no signs of curbing output.

Wall Street opened slightly higher, suggesting a rebound from a two-week decline that had taken the S&P 500 into negative territory for the year. But the weight of the energy drag overtook any optimism about the upcoming earnings season.

"There's a lot of confusion and concern about the impact of energy prices," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

S&P 500 earnings are forecast to have risen 4 percent in the fourth quarter, according to Thomson Reuters data, sharply under the 11.1 percent growth rate forecast on Oct. 1. Energy profits are seen dropping by more than 20 percent.

"What everybody is concerned about is what managements are going to say about crude oil and about global economies," Ghriskey said.

Tiffany & Co (TIF.N: Quote) on Monday cut its full-year forecast, citing a decline in holiday sales from the prior year. The stock plunged 14 percent.   Continued...

 
Traders are pictured at their desks in front of the German share price index DAX board at the Frankfurt stock exchange on January 12, 2015. REUTERS/Remote/Stringer