Wall Street falls on sliding oil, energy stocks

By Margreet Dietz

The Dow Jones Industrial Average fell 0.3 per cent, while the Nasdaq Composite Index slid 0.5 per cent. Photo / AP
The Dow Jones Industrial Average fell 0.3 per cent, while the Nasdaq Composite Index slid 0.5 per cent. Photo / AP

Wall Street fell as energy stocks moved lower with the price of oil amid fresh signs of an unabated global glut.

Oil weakened as American Petroleum Institute data showed inventories rose. Meanwhile, Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day in July, according to Bloomberg.

In 3.05pm trading in New York, the Dow Jones Industrial Average fell 0.3 per cent, while the Nasdaq Composite Index slid 0.5 per cent. In 2.50pm trading, the Standard & Poor's 500 Index declined 0.4 per cent.

The Dow declined as slides in shares of Exxon Mobil and those of Chevron, recently down 2.9 per cent and 1.2 per cent respectively, outweighed gains in shares of Walt Disney and those of Wal-Mart, last up 1.5 per cent and 0.5 per cent respectively.

"It's not a good day for energy at all," Mark Kepner, an equity trader at Themis Trading in Chatham, New Jersey, told Bloomberg.

It wasn't a good day for bank stocks either as investors tried to gauge the timing of a Federal Reserve interest rate increase.

"With financials it's about the 10 year, we're back to 1.50 again. There's that feeling the Fed is probably going to be on hold for September and that's why I think financials are tailing off again," Kepner told Bloomberg.

Shares of Wendy's fell after it reported disappointing sales, the latest US fast-food chain to do so, as a decline in the cost of groceries prompted customers to eat more often at home instead.

Same-restaurant sales increased 0.4 per cent in North America in the second quarter of 2016, Wendy's said in a statement.

Shares of Wendy's traded 1 per cent lower at US$10.09 as of 1.52pm in New York. Earlier in the session the stock dropped as low as US$9.39.

"The most notable driver behind the sales slowdown appears to be the continued gap between cost of eating at home and cost of dining out, which is now at its widest point since the recession," Wendy's Chief Executive Todd Penegor said on a conference call with analysts, Reuters reported.

It's not a good day for energy at all.

It wasn't all bad news. Walt Disney shares rose after the company said it bought a 33 percent stake in BAMTech for US$1 billion, and has the option to acquire majority ownership in the coming years.

"Our investment in BAMTech gives us the technology infrastructure we need to quickly scale and monetise our streaming capabilities at ESPN and across our company," Robert Iger, Disney's chief executive officer, said in a statement. "We look forward to working closely with BAMTech as we explore new ways to deliver the unmatched content of The Walt Disney Company across a variety of platforms."

In Europe, the Stoxx 600 Index fell 0.3 per cent from the previous close. France's CAC 40 index slid 0.4 per cent, as did Germany's DAX index. The UK's FTSE 100 index rose 0.2 per cent.

- BusinessDesk

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