by Jim Jelter
Energy stocks surrendered early gains Friday as momentum from a rising stock market gave way to a 2% drop in crude-oil prices and a bout of profit-taking.
Energy stocks surrendered early gains Friday as momentum from a rising stock market gave way to a 2% drop in crude-oil prices and a bout of profit-taking.
The Amex Oil Index ($XOI :1,298.19, +1.72, +0.1% ) ended up fractionally at 1,298 points, retreating from an all-time intraday high of 1,315 points. The Amex Natural Gas Index ($XNG :500.77, +0.64, +0.1% ) was also back where it started the session at 500 points while the Philadelphia Oil Service Index ($OSX :239.88, -0.23, -0.1% ) fell 0.2% to 240 points, coming off its own all-time high of 244.
Pressure on the sector was coming from investors anxious to lock in three days worth of solid gains and from a $1.26 drop in June crude-oil futures to $61.93 a barrel on the New York Mercantile Exchange - a level not seen since late March. See Futures Movers.
Shares of Royal Dutch Shell Plc. (RDSA :72.22, +0.77, +1.1% ) were among the leading percentage gainers in the oil group, up 1.1%, while Spain's Repsol SA (REP : 33.81, +0.40, +1.2% ) was up 1.2%.
Refiner Valero Energy Corp. (VLO : 73.35, +0.03, +0.0% ) managed to barely cling to earlier gains even as the rest of the group went flat to lower.
Modest gains in the oil service group were bolstered by Nabors Industries Ltd's (NBR : 33.51, +0.79, +2.4% ) strong earnings report, sending the stock 2.4% higher. After Thursday's closing bell, Nabors Industries reported a profit of 92 cents a share on $1.3 billion in revenue, up from $1.18 billion. The results topped the 84 cents a share analysts had expected. Revenue for the quarter rose to $1.3 billion from $1.18 billion. Chesapeake Energy Corp. (CHK :35.54, -0.60, -1.7% ) also reported late Thursday. The independent gas producer said first-quarter net income fell to 50 cents share from $1.44 a year ago, hit by a $193 million hedging loss.
Excluding the loss, Chesapeake's income from ongoing operations was $425 million, or 87 cents a share, compared with the 78-cent consensus among analysts. Revenue fell to $1.58 billion from $1.94 billion.
Chesapeake shares closed down 1.7% at $35.54.
In broker action, Jefferies downgraded Global Industries Ltd. (GLBL : 21.53, -0.24, -1.1% ) to hold from buy on weaker medium-term fundamentals and "stretched valuation." Shares lost 1.1% at $21.53, making it one of the biggest percentage decliners in the oil service index. Earlier this week Global Industries reported first-quarter earnings of 46 cents a share, topping the 34-cent consensus on Wall Street.
Baker Hughes Inc. (BHI :82.27, -0.71, -0.9% ) reported Friday the number of rigs drilling for oil and gas in North America rose by 8 this past week to 1,836. Overall, the U.S. rig count was 122 units higher than a year ago, while the Canadian tally was down by 78 from last year.
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