While you were sleeping: Energy stocks follow oil higher

Thursday 23rd November 2017

Wall Street moved lower, while energy stocks rose with the price of oil ahead of the Thanksgiving holiday.

US financial markets will be closed on Thursday for the Thanksgiving holiday.

In 1.18pm trading in New York, the Dow Jones Industrial Average fell 0.3 percent. However, the Nasdaq Composite Index eked out a 0.02 percent gain. In 1.03pm trading, the Standard & Poor’s 500 Index slipped 0.1 percent.

Earlier in the day the Nasdaq touched a record high of 6,874.52.

“Global financial markets have reached the stage in a shortened holiday week where liquidity comes at an additional premium and assets swing violently on seemingly inconsequential headlines,” Mark McCormick, North American head of foreign-exchange strategy at Toronto-Dominion Bank, wrote in a note, Bloomberg reported.

The Dow fell as declines in shares of Johnson & Johnson and those of Boeing, recently down 1 percent and 0.8 percent respectively, outweighed gains in shares of Verizon and those of General Electric, recently up 1.9 percent and 1.8 percent respectively.

Energy stocks including Chevron and Exxon Mobil moved higher with the price of oil after an Energy Information Administration report showed US crude stockpiles declined last week.

Meanwhile, a Bloomberg survey of analysts and traders predicted that OPEC will extend its deal to curb supply through the end of 2018 when the group meets next week.

Also bucking the trend, shares of Deere rallied after the company posted better-than-expected quarterly earnings and offered a solid outlook amid strong demand for its farm machinery and construction equipment.

"We saw higher overall demand for our products with farm machinery sales in South America making especially strong gains and construction equipment sales rising sharply," Samuel Allen, Deere's chief executive officer, said in a statement. "At the same time, the company realised continued benefits from its broad product portfolio and agile cost structure."

The company said it expects its acquisition of the Wirtgen Group, the world's leading manufacturer of road construction equipment, to be finalised next month.

“Wirtgen will establish Deere as a substantially more prominent player in global construction-equipment markets," Allen said.

Shares rose 4.5 percent as of 12.32pm in New York.

“The outlook comments reinforce our view of a normalisation in new agricultural machinery share of total farmer capex, with Deere’s large equipment early order program pointing to five percent to 10 percent US & Canada agricultural equipment retail demand growth despite flat total farmer capex,” according to Goldman Sachs analyst Jerry Revich, Bloomberg reported.

In Europe, the Stoxx 600 Index finished the session with a 0.3 percent retreat from the previous close. France’s CAC 40 Index fell 0.3 percent, and Germany’s DAX Index dropped 1.2 percent.

The UK’s FTSE 100 Index rose 0.1 percent.

(BusinessDesk)

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