Oil tumbles, weighs on energy shares; bank stocks rise

Oil prices dropped about 5 percent on Monday, putting pressure on energy shares and keeping global stock markets in check, although financial shares rallied after upbeat news from Bank of America and Deutsche Bank.


Reuters | Updated: 16-07-2018 23:52 IST | Created: 16-07-2018 23:52 IST
Oil tumbles, weighs on energy shares; bank stocks rise
Oil slumped as Libyan ports reopened and traders eyed potential supply increases by Russia. (Image Credit: Pixabay)

Oil prices dropped about 5 percent on Monday, putting pressure on energy shares and keeping global stock markets in check, although financial shares rallied after upbeat news from Bank of America and Deutsche Bank.

Oil slumped as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers.

U.S. crude fell 4.59 percent to $67.75 per barrel, while Brent was last at $71.69, down 4.83 percent on the day, and touched a three-month low.

Wall Street's main indexes were little changed following strong weeks as investors geared up for a big week of corporate earnings and awaited commentary on the impact of trade disputes between the United States and its trading partners.

"Trade and trade rhetoric will be a focus of the market," said Mona Mahajan, U.S. investment strategist at Allianz Global Investors in New York.

"As we get into earnings season in particular we are going to be watching for management teams to discuss their outlooks not only in the numbers but more generally anecdotally how trade could impact their businesses.”

The Dow Jones Industrial Average rose 17.35 points, or 0.07 percent, to 25,036.76, the S&P 500 lost 1.93 points, or 0.07 percent, to 2,799.38 and the Nasdaq Composite dropped 12.01 points, or 0.15 percent, to 7,813.97.

Major energy stocks such as Exxon Mobil, Chevron and BP weighed on key indexes.

Financials in the U.S. and Europe were higher following Bank of America's better-than-expected quarterly profit and Deutsche Bank's upbeat earnings preview.

Overall in Europe, the pan-European FTSEurofirst 300 index lost 0.34 percent.

MSCI's gauge of stocks across the globe shed 0.11 percent.

Markets looked ahead to U.S. Federal Reserve Chairman Jerome Powell's semiannual testimony on the economy and monetary policy before the U.S. Senate Banking Committee on Tuesday.

The dollar fell after posting its largest weekly gain in a month, as investors pared back their long bets on the greenback.

The dollar index fell 0.24 percent, with the euro up 0.22 percent to $1.1711.

The rouble held gains after a meeting between Russian President Vladimir Putin and U.S. President Donald Trump helped offset a negative impact from the drop in oil prices.

U.S. Treasury yields increased with the two-year yield hitting a near decade peak as domestic retail sales recorded growth for a fifth straight month in June, supporting the view of solid economic growth in the second quarter.

Benchmark 10-year notes last fell 7/32 in price to yield 2.8545 percent, from 2.831 percent late on Friday. 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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