US stocks: Dip as oil hits energy sector
25.04.06 9.40am
NEW YORK - US stocks ended slightly lower on Monday, as sinking crude oil prices dragged energy companies' shares lower, while a court decision against Merck & Co. Inc. hurt the pharmaceutical sector.
But the 2.5 per cent pullback in the price of oil trimmed losses overall as cheaper energy costs should have a positive impact on corporate profits.
Oil fell sharply on Monday after Opec promised to keep pumping near maximum capacity, but the cartel said it could not cool the red hot market. At the same time, traders took profits from the record high above US$75 a barrel hit last week.
Shares of Exxon Mobil Corp., the world's largest publicly traded oil company, declined almost 1 per cent and were the top drag on the Dow. ConocoPhillips shares fell 3.7 per cent and were the biggest drag on the S&P 500.
"Falling oil is not a positive for oil stocks," said Lincoln Anderson, chief investment officer at LPL Financial Services in Boston. But "the Opec statement is on the positive side" for stocks overall.
The Dow Jones industrial average was down 11.13 points, or 0.10 per cent, to end at 11,336.32. The Standard & Poor's 500 Index was down 3.17 points, or 0.24 per cent, to finish at 1,308.11. The Nasdaq Composite Index was down 9.48 points, or 0.40 per cent, to close at 2,333.38.
Trading was moderate on the New York Stock Exchange where decliners beat advancers by a ratio of about 3 to 2. About 1.51 billion shares exchanged hands, below the 1.61 billion daily average for last year.
On Nasdaq, decliners outnumbered advancers by a ratio of about 2 to 1, with about 1.98 billion shares traded, above the 1.80 billion daily average last year.
Ford Motor Co.'s stock slid 4.9 per cent, or 36 cents, to US$6.96 and was the most heavily traded issue on the NYSE. During the session, Ford's stock hit a three-year low at US$6.91. Prudential Equity Group said it lowered its price target for the carmaker's stock after a weak first quarter.
Shares of General Motors Corp. dropped 1.6 per cent, or 34 cents, to US$21.45.
US light crude for June delivery fell US$1.84 to settle at US$73.33 a barrel, down from the record high of US$75.35 struck on Friday.
Shares of Exxon Mobil fell 59 cents to US$64.41.
ConocoPhillips' shares ended down US$2.66 at US$69.84.
Shares of drug maker Merck, a Dow component, dropped 1.1 per cent, or 37 cents, to US$34.37 after a Texas jury on Friday found that the painkiller Vioxx caused the death of a 71-year-old man.
American Express shares fell 0.9 per cent, or 47 cents, to US$51.78 after the credit card and travel company reported earnings that were slightly better than expectations, though some investors had hoped the results would be even stronger.
Caterpillar Inc. reported stronger-than-expected quarterly earnings and raised its full-year forecast as big demand for commodities boosted sales of its mining and energy equipment.
But that performance, which has driven its stock price up 72 per cent on a split-adjusted basis over the past year and permitted Caterpillar to easily outrun its blue-chip peers, has left some analysts wondering how much higher the cyclical stock can go. It's the best-performing Dow stock this year.
In Monday's session, Caterpillar ended down 0.6 per cent, or 49 cents, at US$77.38 on the NYSE.
