Energy shares led the decline in Tuesday’s broad-based sell-off in the S&P 500, leaving the sector recording its biggest one-day drop in more than a month.
The S&P 500 energy sector index slid 2.9 per cent after a report from the International Energy Agency warned that the global oil glut would continue into 2017 — as Opec continued to pump at near-record levels and demand growth slowed more than expected — sending crude prices sharply lower.
Chesapeake Energy shares fell 8.3 per cent to $7.38, Murphy Oil declined 7.5 per cent to $26.14, Transocean dropped 5.1 per cent to $9.31, and Marathon Oil declined 7.3 per cent to $14.34.
The energy sector has advanced more than 12 per cent this year and is the second-biggest gainer on the benchmark S&P 500. Brent crude, the global oil benchmark, has climbed 70.7 per cent from its January low, aided by supply disruptions and hopes of an output freeze. However, prices have remained nearly 59 per cent below mid-2014 levels when the decline in crude first began.
The sell-off in energy shares came on a downbeat day for US stocks. At the close, the S&P 500 had declined 1.5 per cent to 2,127, a day after dovish remarks from Federal Reserve board of governors member Lael Brainard helped the index to its best day in two months. Meanwhile, the Dow Jones Industrial Average slid 1.4 per cent to 18,066.8, while the Nasdaq Composite fell 1.1 per cent to 5,155.3.
Elsewhere, Apple shares gained 2.4 per cent to $107.95, rising the most in nearly seven weeks after T-Mobile and Sprint reported record iPhone 7 pre-orders.
John Legere, T-Mobile’s chief executive, said in tweets on Tuesday that the pre-orders received for the iPhone 7 over the past four days were the biggest in the company’s history. He added: “Any way you do the math, the iPhone 7 launch start has been huge and historic.”
Sprint said pre-orders for iPhone 7 and iPhone 7 Plus “are up more than 375 per cent” during the first three days, compared with last year.
It was, however, unclear how much of the orders were being driven by enthusiasm for the device itself and how much by promotional activities. T-Mobile, for instance, is offering a free trade-in deal on the iPhone 7.
Meanwhile, shares in Weight Watchers International fell 6.6 per cent to $9.68 after the purveyor of diets and weight loss advice said James Chambers, its chief executive, would leave the company at the end of the month.
The New York-based company said it was starting a search for a chief executive and that media mogul Oprah Winfrey, one of the company’s biggest shareholders, would be actively involved in the hunt.
Until a permanent chief executive is appointed, however, the company has created an interim office for the position consisting of Nicholas Hotchkin, chief financial officer, and directors Thilo Semmelbauer and Christopher Sobecki.
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