US stocks were little changed after the largest rally since Jan 2013, as energy producers lost after oil dropped to below $80 per barrel as telephone and consumer staples shares climbed.
The S&P 500 Index dropped less than 0.2% to 1,961.54 in New York. Equities pared losses as the European Central Bank announced that it would settle $2.2 billion of the covered bond purchases last week as it began its latest effort to revive the economy of the region.
The Dow Jones Industrial Average gained 12.98 points at 16,817.49 while the Russell Index dropped 0.1%. The Nasdaq Composite index dropped one point to 4,483.
Hennessy Funds portfolio manager, Skip Aylesworth, was quoted by Bloomberg as having said, “Oil is the major thing on people’s minds right now. What we’re seeing is a major shift in oil pricing where prices have dropped and you have producers being impacted the most.”
He added, “Europe’s in trouble and Asia’s slowing down, there’s less demand and the question is will lower oil prices all of a sudden make oil not profitable to drill for and will this new kind of drilling for new sources slow down.”
Traders said that most of the action for the day surrounded energy shares posting the largest declines. The S&P 500 Energy sector index dropped 2% recently. Major producers dropped, with Exxon Mobil dropping 1% and Chevron Corp dropping 0.6%, as reported by The Wall Street Journal.
ITG brokerage head of sales trading, Brian Fenske said, “This week is starting similar to other weeks, which is, ‘Hey, let’s wait for the macro data points and the earnings to roll in’.”
Wells Fargo Private Bank regional chief investment officer, Mike Serio said, ‘The US is the place to be right now. We’re seeing money continue to come into the US, continue to go into our stock market and continue to go into our bonds.”
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