MW:Crude, jobs data send energy stocks sharply lower
Energy stocks opened lower Wednesday, clipped by a 175-point opening drop by the Dow Jones Industrials Average and a steep $3 drop in oil prices following a report of bearish supply data.
Early trades carried the Amex Oil Index 4.3% lower to 983.2 points, with all 13 components wallowing in the red. Independent producers and refiners were leading percentage decliners in the group. Marathon Oil Corp. shares were down 7% at $27.75 while Valero Energy Corp. was off 7.1% at $23.18.
Exxon Mobil , showing that size matters, was off 2.5% at $78.25 a share. But other major oil companies were looking more vulnerable to the pressure. Chevron Corp. , the second-biggest U.S. oil company after Exxon, was down 3.5% at $74.65 and No. 3 ConocoPhillips was down 4.6% at $53.11.
The losses were even worse on the Philadelphia Oil Service Index , which was down nearly 7% at 132.7 points, with all components deep in the red.
A couple of drillers got dinged by downgrades. Citigroup lowered its recommendations on Pride International and Hercules Offshore Inc. to sell from hold. Pride was down 6.8% at $17.80 while Hercules Offshore was off 5% at $5.46 at last glance.
The Amex Natural Gas Index was down 5.2% at 392.9 points. As with the two other industry benchmarks, all components of this index were also in negative territory, led by Southwestern Energy Co.'s 8% decline to $31.03 a share.
Crude for February delivery was last down $3 at barrel at $45.58 on the New York Mercantile Exchange. The Energy Department reported U.S. crude inventories rose 6.7 million barrels for the week ended Jan. 2, far more than the 1.5 million analysts had been looking for. The rise in fuel stocks provided further evidence of declining demand in both transportation and manufacturing. See Futures Movers.
Also weighing on the market was release of the ADP employment index, which showed U.S. private-sector firms shed 693,000 jobs in December. The number was far worse than expected and paints "a shockingly weak picture of the labor market," said John Ryding and Conrad DeQuadros, economists at RDQ Economics.
The nation's labor market is on track for the largest quarterly decline since 1945, they said.
