Energy Stocks on Track for Worst Week Since February
2017年6月23日 - 11:35PM
Dow Jones News
By Riva Gold and Kenan Machado
U.S. stocks were little changed Friday, as energy companies in
the S&P 500 were on track to post their biggest weekly fall
since February 2016.
The price of oil tumbled during the week, pressuring shares of
energy companies and equipment makers as lower oil prices can hurt
their profit margins. Many investors expected the price of oil had
stabilized in recent months, and bought energy shares on
expectations of a return to earnings growth. The sharp fall in
U.S.-traded crude oil this week calls that investment thesis into
question.
U.S.-traded crude oil slipped 0.2% at $42.65 a barrel, on track
to end the week more than 4% lower and off roughly 12% from the
start of the month. Oil prices have been a drag on stock markets
this week, with the S&P 500 energy sector down 3.3%, its worst
weekly performance since the week ended Feb. 5, 2016.
On Friday, energy stocks bounced back slightly, up 0.3%. The
broader S&P 500 index lost less than 0.1%, while the Nasdaq
Composite slipped 0.1%. The Dow Jones Industrial Average fell 40
points, or 0.2%, to 21357.
Bank shares were a touch higher after the Federal Reserve said
the largest banks survived a hypothetical "stress test," suggesting
some could win the Fed's approval to increase dividend payouts to
investors next week.
Shares of pharmaceutical companies and biotech firms were on
track to post their best week since after the November election
after Senate Republicans unveiled their plans to overhaul the
Affordable Care Act. In the past year, biotech stocks suffered as
some investors feared increased scrutiny of drug pricing. Recently,
however, investors scooped up biotech stocks as the administration
has steered clear of rolling out such rules.
The S&P 500 health-care sector is on track to end the week
up 3.4%, its biggest gain since the week ending Nov. 11, while the
Nasdaq Biotechnology Index is up 8.3% so far this week. On Friday,
health-care and biotech stocks ticked lower.
In corporate news, shares of Bed Bath & Beyond fell 12%
after its earnings missed expectations.
Global stocks found little traction Friday, while the British
pound inched up on the first anniversary of the U.K.'s vote to
leave the European Union.
The Stoxx Europe 600 slipped 0.4% amid losses in autos and food
and beverage companies, while London's export-heavy FTSE 100
declined 0.2% as the pound climbed 0.2% to $1.2708, paring the
week's declines.
Since the June 23, 2016, U.K. referendum in 2016, the FTSE 100
index, which generates roughly two-thirds of its revenue overseas,
has climbed about 17%, while the pound has fallen roughly 15%. The
pound now looks cheap compared with historical levels, but U.K.
interest-rate expectations have fallen significantly since the
vote, with growth expected to slow this year, keeping the currency
under pressure.
"We don't see a recession on the horizon," said Ed Smith,
strategist at Rathbones. "But the only thing that has really driven
the U.K. economy higher over the last two years has been the
consumer and household spending, and we think that's going to
suffer," he said, noting the sharp fall in the pound has
precipitated a rise in inflation that has outpaced real wage
growth.
Elsewhere in markets, yields on 10-year Treasury notes were
little changed at 2.152% from 2.153% Thursday, while the WSJ Dollar
Index edged down 0.2%.
Earlier, Shanghai stocks recovered to trade up 0.3% in a
volatile session after increased regulatory scrutiny over the
borrowings of China's most prolific overseas deal makers sent
markets lower. The Shanghai Composite Index dropped as much as 0.9%
following news that regulators had ordered banks to check their
loans to major Chinese conglomerates.
The choppy moves could heighten apprehensions about volatility
that bogged down Chinese markets for most of last year, just days
after index compiler MSCI decided to include A-shares in its
emerging markets indexes next year. A dominance of retail traders
that move in and out of the world's second-biggest stock market has
meant that trades often happen on rumor and sentiment.
--Shen Hong and Ryan Tracy contributed to this article.
Write to Riva Gold at riva.gold@wsj.com and Kenan Machado at
kenan.machado@wsj.com
(END) Dow Jones Newswires
June 23, 2017 10:20 ET (14:20 GMT)
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