MW: Energy stocks swept lower in broad market sell-off
Key oil stocks index wraps up tough week with a 5% loss
By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) -- Energy stocks tumbled Friday, caught in a 323-point drop on the Dow Jones Industrial Average as a weak May jobs report and a drop another drop in the value of the euro took a steep toll on the broad equities market.
The weak jobs report and fears Europe might be headed for a double-dip recession are fanning concerns of tepid energy demand over the rest of the year. Oil futures fell 4.1% in New York, sending the price of crude for July delivery down $3.10 to close at $71.51 a barrel, its biggest one-day drop since February. Read Futures Movers.
Dow industrials components Exxon Mobil (XOM 59.53, -2.04, -3.31%) and Chevron (CVX 71.28, -2.63, -3.56%) dropped 3.3% and 3.6%, respectively, putting them near the leading edge of the Dow's (DJIA 9,932, -323.31, -3.15%) 3% tumble to 9,931.
The NYSE Arca Oil Index (XOI 914.99, -40.75, -4.26%) fell 4.3% to close at 914.84 points, leaving it with a 5% decline for the week.
The NYSE Arca Natural Gas Index (XNG 505.64, -20.68, -3.93%) dropped 3.9% to 505.71 points, down 0.1% for the week.
The Philadelphia Oil Service Index (OSX 164.83, -4.44, -2.62%) dropped 2.6% to 164.83 points, down 4.2% for the week.
Among stocks in the spotlight, BP PLC (BP 37.16, -2.11, -5.37%) fell 5.4% to close at $37.16 as it attached a containment cap over the leaking riser pipe in the Gulf of Mexico. Meanwhile, BP chairman Carl-Henric Svanberg voiced support for CEO Tony Hayward. See full story.
BP shares are down 37% since the April 20 Deepwater Horizon well blowout off Louisiana, wiping out $70 billion in the London-based company's market capitalization.
The steep toll the blowout is taking on BP financially and politically is raising questions about the future of its dividend to shareholders. It also prompted Standard & Poor's Ratings Services to cut its long-term corporate credit rating on BP to AA- from AA and place the company on its CreditWatch with negative implications.
"The downgrade reflects our opinion on the significant operational challenges that U.K.-headquartered oil major BP continues to face to stem or contain the leak from one of its wells in the Gulf of Mexico," S&P credit analyst Simon Redmond said in a note issued Friday.
Transocean (RIG 50.20, -0.91, -1.78%) , which owned the Deepwater Horizon rig BP was using to drill the well, saw its share price slide another 1.8% Friday, bringing its decline for the week to nearly 12%.
