Marathon Oil led a broad decline in the oil sector’s stocks as crude prices fell back after a bumper seven-session rally.
West Texas Intermediate, the US benchmark, fell 3 per cent to $47.05 on Monday, ending a rally that saw its price rise more than 20 per cent since August 2.
Last week’s rise came off the back of hopes that Opec and other big oil producers might finally be looking at a long-discussed output freeze. Positive data and bets by hedge funds that the oil price would rise also helped to send prices higher.
But Monday’s pullback led to a broad decline in oil company stock prices.
Marathon, the Houston-based exploration and production company, led the pack, falling 6.9 per cent to $15.64 amid the additional investor pressure triggered by managerial changes.
JR Sult, the company’s chief financial officer, left the company on Monday, citing personal reasons. Pat Wagner, vice-president of corporate development and strategy, has been named interim chief financial officer.
Marathon, also the worst-performing stock in the S&P 500 index on Monday, has struggled due to the prolonged drop in oil prices.
It reported its sixth straight quarterly loss this month, cutting its production outlook for the year. It has curtailed spending and sold off more than $1bn in assets.
It said its revenue fell below $1bn in May for the first time since it became a standalone company in 2002.
At the other end of the spectrum, pharmaceutical companies saw early gains after Pfizer reached a deal worth $14bn to acquire California biotechnology company Medivation.
Pfizer, the world’s second-largest drugmaker, saw its stock tick up by 0.2 per cent before giving up ground and closing 0.4 per cent lower at $34.84. Medivation, not in the S&P 500 index, soared higher, up 19.7 per cent to $80.42.
The top three performers in the S&P 500 index were pharmaceutical companies.
Elsewhere, clothing brand Urban Outfitters saw its stock fall 3.2 per cent to $36.61 as Goldman Sachs downgraded it from buy to neutral. The bank suggested it was at “near peak” operating performance, leaving less room for meaningful improvement.
The S&P 500 was relatively unchanged at 2,182.6, the Dow Jones Industrial Average lost 0.1 per cent to 18,529.4, and the Nasdaq Composite ticked 0.1 per cent higher to 5,244.6.
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