U.S. Stocks Turning In Mixed Performance Amid Spike In Oil Prices
After posting strong gains last week, the major U.S. stocks indexes are turning in a mixed performance during trading on Monday. While the Nasdaq and the S&P 500 have moved lower on the day, the narrower Dow is seeing further upside.
Currently, the Dow is up 199.40 points or 0.6 percent at 33,473.55 after reaching its best intraday level in over a month. Meanwhile, the Nasdaq is down 116.11 points or 1.0 percent at 12,105.80 and the S&P 500 is down 3.59 points or 0.1 percent at 4,105.72.
The mixed performance on Wall Street comes amid a surge by the price of crude oil, with crude for May delivery skyrocketing $4.67 or 6.2 percent to $80.34 a barrel.
The spike by the price of crude oil comes after OPEC and their oil-producing allies announced a surprise decision to reduce output by 1.16 million barrels per day.
A Saudi Arabian Ministry of Energy official called the output cut a “precautionary measure aimed at supporting the stability of the oil market.”
Energy stocks have moved sharply higher along with the price of crude oil, driving the Philadelphia Oil Service Index and the NYSE Arca Oil Index up by 5.5 percent and 4.1 percent, respectively.
The Dow has benefited from a surge by shares of Chevron (CVX), with the energy giant spiking by nearly 4.0 percent.
Gold stocks are also seeing considerable strength on the day, as reflected by the 2.4 percent jump by the NYSE Arca Gold Bugs Index. The strength in the sector comes amid an increase by the price of gold.
On the other hand, concerns about higher jet fuel prices are weighing on airline stocks, dragging the NYSE Arca Airline Index down by 2.3 percent.
Significant weakness is also visible among brokerage stocks, resulting in a 1.8 percent drop by the NYSE Arca Broker/Dealer Index.
Semiconductor, software and networking stocks are also seeing notable weakness, contributing to the sharp pullback by the tech-heavy Nasdaq.
On the U.S. economic front, the Institute for Supply Management released a report showing manufacturing activity in the U.S. contracted at a slightly faster rate in the month of March.
The ISM said its manufacturing PMI dipped to 46.3 in March from 47.7 in February, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.5.
With the bigger than expected decrease, the manufacturing PMI dropped to its lowest level since hitting 43.5 in May 2020.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.5perent, while China’s Shanghai Composite Index advanced by 0.7 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index fell by 0.4 percent, the French CAC 40 Index edged up by 0.2 percent and the U.K.’s FTSE 100 Index rose by 0.5 percent.
In the bond market, treasuries are extending the notable upward move seen last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 8.1 basis points at 3.413 percent.
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