Stocks close lower as energy weighs; S&P 500 back in the red for 2015

29.12.2015 00:04

Evelyn Cheng |

 

U.S. stocks closed lower in light volume trade Monday, the start to the last trading week of the year, as a renewed slide in oil prices weighed. (Tweet This )

Amazon and Disney rose more than 1 percent in afternoon trade to help consumer discretionary gain as one of a few sector advancers in the S&P 500.

Amazon said Monday that during the third week of December, more than three million joined its Prime service, which has “tens of millions” of members worldwide.

Disney’s “Star Wars: The Force Awakens” reached $1 billion in worldwide box office revenues in a record-setting 12 days, industry analytics group Rentrak said Sunday.

Energy was off more than 1.5 percent to lead S&P decliners in afternoon trade, taking the S&P 500 back into negative territory for the year so far in intraday trade.

“It continues to show all eyes continue to be on oil right now and the real story is, when does oil come to a bottom, and what are the additional pressures from oil and energy companies that people are worried about,” said Jeff Carbone, co-founder and managing partner of Cornerstone Financial Partners.

Chevron was the greatest weight on the Dow Jones industrial average in afternoon trade. The index traded about 30 points lower after earlier falling 100 points. Disney contributed the most to gains.

The Dow transports held more than half a percent lower in afternoon trade after earlier falling more than 1 percent with Kirby leading nearly all constituents lower. The index was on track to break a four-day win streak and was down more than 15 percent year-to-date, on pace for its worst year since 2008.

“Transports have come back. We’re beginning to lift in spite of oil prices near their lows of the day,” said Peter Cardillo, chief market economist at First Standard Financial. There’s some “bargain hunting coming into transports.”

U.S. crude oil futures settled down $1.29, or 3.39 percent, at $36.81 a barrel. Brent was last off more than 3 percent near $36.60 a barrel. U.S. crude struggled to hold its premium to the internationally traded Brent.

WTI gained 9 percent last week, helping U.S. stocks post their best week of the month so far. However, WTI is on track for its second-straight monthly decline and its second consecutive annual loss since the years 1997 to 1998.

“With not much data driving the market, maybe some year-end cleaning up of portfolios. … I’m not overly concerned. This (decline) is really oil,” said Chris Gaffney, president, Everbank World Markets.

“I think demand’s still going to be there. While we’ve got OPEC pumping as fast as they can, I feel like we’re nearing a bottom but it’s still tough to call it,” he said. He expects higher oil prices next year.

Freeport-McMoRan fell more than 8.5 percent in afternoon trade to weigh on the materials sector. The firm announced that co-founder and long-time executive James Moffett will step down from the board and as Executive Chairman.

The Nasdaq composite also declined as Apple and the iShares Nasdaq Biotechnology ETF (IBB) fell more than half a percent in afternoon trade.

Read MoreWhy the week ahead is so pivotal for the stock market

In a light day of economic reports, the Texas Manufacturing Outlook Survey showed Texas factory activity increased for a third month in a row in December to 13.4. However, the the index of future general business activity turned negative in December.

Treasury yields traded mixed, with the 10-year yield mildly lower near 2.23 percent and the 2-year yield higher around 1.01 percent.

The Treasury Department auctioned $26 billion in 2-year notes at a high yield of 1.056 percent.

The U.S. dollar traded a touch lower against major world currencies, with the euro near $1.098 and the yen at 120.35 yen against the greenback in afternoon trade.

European stocks ended lower amid the decline in oil. London’s FTSE index was closed for a U.K. public holiday. Asian equities closed mostly lower, with the Shanghai composite down about 2.5 percent for its worst day since Nov. 27. The Shanghai composite is still on pace for its first two-year win streak since 2007.

In afternoon trade Monday, the S&P 500 was down about 0.2 percent for the year so far, and the Dow was off more than 1.5 percent. The Nasdaq composite was up more than 6 percent year-to-date.

The last trading week of the year is historically positive for stocks — the so-called Santa Claus rally.

Jeffrey A. Hirsch of the Stock Trader’s Almanac said in a note that the seven-day trading day period between the open of Dec. 24 and the close of trade on Jan. 5 usually sees an average 1.5 percent return for the S&P 500.

“The failure of stocks to rally during this time tends to precede bear markets or times when stocks could be purchased at lower prices later in the year,” he said.

Symbol
Name
Price
Change
%Change
DJIA Dow Jones Industrial Average 17528.47 -23.70 -0.14%
S&P 500 S&P 500 Index 2056.50 -4.49 -0.22%
NASDAQ Nasdaq Composite Index 5040.98 -7.51 -0.15%

In afternoon trade, the Dow Jones industrial average declined 40 points, or 0.23 percent, to 17,511, with Chevron the greatest decliner and Walt Disney leading a handful of advancers.

The S&P 500 traded down 7 points, or 0.36 percent, to 2,053, with energy leading seven sectors lower and consumer discretionary leading advancers.

The Nasdaq composite declined 20 points, or 0.40 percent, to 5,028.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 17.

About two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 289 million and a composite volume of nearly 1.4 billion as of 1:48 p.m., ET.

Read MoreEarly movers: AMZN, DIS, PBY, GOOGL, AAPL, FDX, CMG & more

Crude oil futures for February delivery fell $1.30 to $36.79 a barrel on the New York Mercantile Exchange.

Gold futures settled down $7.60 at $1,068.30 an ounce.





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