Last updated: March 28, 2012 10:12 pm

US energy stocks down on oil news

Energy stocks continued their March woes and led US equities lower again as the US, France and the UK discussed a possible release of oil reserves to drive down triple-digit oil prices and US natural gas prices traded near a 10-year low.

Energy stocks in the S&P 500 have fallen 5.5 per cent this month, making the sector the worst-performer in the S&P 500 by some distance.


On this story

On this topic

IN US Equities

Coalminers were hit by regulations announced on Tuesday by the US Environmental Protection Agency on the levels of carbon dioxide emitted by power stations.

Shares in Peabody Energy dropped 3.4 per cent to $28.83 and have fallen 14 per cent in the year to date. Alpha Natural Resources , another coalminer, fell by 4.2 per cent to $14.87.

Oil and gas companies were hit as prices for both commodities continued to decline on Wednesday. WPX Energy, Occidental Petroleum and Chesapeake Energy each fell by more than 3.5 per cent.

Materials stocks also performed poorly, with the sector falling 1.5 per cent, led lower by gold and copper miner Freeport-McMoRan , which slid 3.6 per cent to $37.36.

Overall, the S&P 500 fell 0.5 per cent to 1,405.54 as economic data showed durable goods orders in February rose 2.2 per cent but were below analyst expectations of 3 per cent. The benchmark US index briefly dropped beneath 1,400 for the first since last Friday’s close, and was in slightly negative territory for the week.

The Dow Jones Industrial Average dropped 0.5 per cent to 13,126.14 and the Nasdaq Composite index fell 0.5 per cent to 3,104.96.

Apple broke through the $620 mark to an all-time high of $621.45 in the morning session, before ending the day at $617.62, for a gain of 0.5 per cent. Investors brushed off reports of an embarrassing iPad launch in Australia, where the group was forced to admit the product was incompatible with local 4G wireless networks, as Australia’s consumer watchdog said it would take Apple to court for misleading statements.

Tyco International , the US industrial conglomerate, was among the biggest risers on the benchmark US index, adding 4.3 per cent to $55.81.

The Swiss-based parent company of Tyco Group said it would merge its flow controls business with Pentair , the water filtration and thermal management company, in an all-stock deal that values the unit at about $4.9bn, including debt. Shares in Pentair rose 15.1 per cent to $46.32 on news of the deal.

Medco Health Solutions , the pharmacy benefits manager, rose 3.2 per cent to $71.22 after it said its $29.1bn takeover by rival Express Scripts might be completed as early as next week. Shares in Express Scripts climbed 1.3 per cent to $53.89.

Goldman Sachs ended the day flat at $126.36, despite reports that the company had settled a dispute with a union pension fund over its board structure that could have resulted in the removal of chief executive Lloyd Blankfein from his other role as chairman of the bank.

Investment banking rival Morgan Stanley fell 2.3 per cent to $20.24, but commercial lenders Bank of America and Citigroup both climbed, as the financial sector of the S&P 500 eked out a gain.

Google, the second-most heavily weighted stock on the Nasdaq, climbed 1.4 per cent to $655.76 as analysts at Citigroup raised their price target for the online search provider to $750.

“Google shares are flat year to date, materially underperforming the S&P 500,” said Mark Mahaney at Citigroup. “A series of overhangs related to the rise of social networks, the pending Motorola Mobility acquisition and mounting regulatory scrutiny – as well as a big [fourth-quarter miss] – have all been behind the underperformance.

“But near-term checks, new proprietary segment analysis and a highly-attractive valuation all lead us to reiterate our ‘buy’ [rating],” he added.

Yelp, the business reviews website, rose by as much as 15.6 per cent early in the session as investors’ appetite for the tech stock soared. At one point shares in Yelp, which went public on March 2, were trading at twice their initial offer price of $15, but the stock pared gains drastically in the afternoon session, ending the day up just 1.6 per cent at $28.09.

Shares in Annie’s, the Californian organic food producer and retailer, popped 89 per cent to $35.92, the day after its IPO, which had priced shares at $19.

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from and redistribute by email or post to the web.


Sign up for email briefings to stay up to date on topics you are interested in