Energy sector starts week on a low note.
Oil and gas stocks got off to a shaky start Monday as crude-oil prices fell well below $71 a barrel and the broad market fell 55 points on a negative report on ballooning housing inventories.
Oil and gas stocks got off to a shaky start Monday as crude-oil prices fell well below $71 a barrel and the broad market fell 55 points on a negative report on ballooning housing inventories.
Early action saw the Amex Oil Index (XOI:1,345.84, -6.71, -0.5%) slump 1% to 1,339 points, tracking a 67-cent, or 0.9%, drop in the October crude-oil futures contract to $70.42 a barrel on the New York Mercantile Exchange.
Among individual shares, Royal Dutch Shell (RDSA:75.00, -1.02, -1.3%) was leading percentage decliners in the oil group, down 1.4% at $74.88, with Hess Corp. (HES: 58.99, -0.10, -0.2%) keeping it company with a 1.4% drop to $58.27.
A 5% tumble by the September natural-gas contract weighed heavily on the Amex Natural Gas Index (XNG: 478.09, -7.85, -1.6%) , sending it 1.6% lower to 478 points. Energy traders blamed the weakness on unusually high gas supplies for this time of year and forecasts of mild weather over much of the country, which translates to slower demand for gas-fueled power generation to run air conditioners.
The Philadelphia Oil Service Index ($OSX: 265.20, -2.63, -1.0%) was off 0.9% at 265 points, folding back on last week's strong 6.2% gain. While most of the group was trading lower, driller Rowan Companies, Inc. (RDC: 38.13, +0.13, +0.3%) rose as much as 80 cents to an early session high of $38.80 following a glowing research note from Bear Stearns that raised the company to outperform from peer perform.
Lehman launched coverage of Hercules Offshore Inc. (HERO:27.30, +0.33, +1.2%) , starting the company at overweight. The stock was off 0.6% at $26.81.
Via: Market Watch
by Jim Jelter
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