Tuesday 12th May 2015 |
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Stocks on both sides of the Atlantic moved lower amid worries about Greece’s financial outlook, and as the price of oil slid on concerns US crude output was set to rise anew.
In late trading in New York, the Dow Jones Industrial Average fell 0.35 percent, while the Standard & Poor’s 500 Index slid 0.31 percent. The Nasdaq Composite Index eked out a 0.04 percent gain.
After a stronger-than-expected jobs report for April, released last Friday, investors are eyeing a US retail sales report, due Wednesday, for fresh clues on the economy and the timing of a Federal Reserve interest rate increase.
The Dow moved lower as slides in shares of Exxon Mobil and those of Travelers, last down 2.3 percent and 1.9 percent respectively, outweighed gains in shares of Caterpillar and those of American Express, last up 1.9 percent and 1.1 percent respectively.
Exxon Mobil weakened along with other energy stocks including Chevron, which last traded 1.1 percent lower, as oil declined amid renewed concern about a worldwide glut, and in particular signs that US shale producers plan to ramp up output.
The Organisation of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at US$100 barrel again in the next decade, the Wall Street Journal reported, citing people familiar with its latest strategy report.
Brent for June settlement slid 0.8 percent to US$64.86 a barrel in London, while West Texas Intermediate for June delivery fell 0.6 percent to US$59.03 a barrel in New York.
"It's pretty choppy as people try to figure out a clearer supply-demand situation," Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut, told Reuters.
Separately, the Obama administration unexpectedly gave Royal Dutch Shell the right to drill for oil and gas off Alaska’s coast despite objections over potential environmental impacts. A US government agency estimates that Arctic seas contain 24 billion barrels of oil.
In Europe, most stock markets weakened, as did the euro, and euro-zone bonds. Greece’s ASE Index dropped 2.5 percent. The UK’s FTSE 100 Index fell 0.2 percent, Germany’s DAX declined 0.3 percent, while France’s CAC 40 Index fell 1.2 percent. Even so, the Stoxx Europe 600 Index finished the session with a 0.3 percent increase from the previous close.
“Greece is a never ending story,” Benno Galliker, a trader at Luzerner Kantonalbank in Lucerne, Switzerland, told Bloomberg. “I think they will find a solution to kick the can down the road once more.”
While Greece made a 750 million euro payment to the International Monetary Fund ahead of Tuesday’s deadline, the country’s financial outlook remains as clouded as ever and there remain concerns that it may run out of money to pay its most basic bills within weeks.
“We are making faster progress,” Dutch Finance Minister Jeroen Dijsselbloem told reporters on Monday in Brussels after chairing a meeting of euro ministers, Bloomberg reported. “I’m not satisfied but just a bit more optimistic, the way the talks take place in the way they negotiate has been improved.”
(BusinessDesk)
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