Energy companies and oil prices on Friday took their worst losses in months on reports OPEC countries plan to produce more oil soon. Stock indexes finished an indecisive week with small losses.
US crude oil sank 4 percent after multiple reports indicated that Russia and OPEC could start producing more oil soon. They cut production at the start of last year following a big buildup in supplies that had pushed prices lower.
In November last year they extended that cut through the end of this year, but according to reports this week, they might agree to start raising production next month.
US crude on Monday finished at a three-year high and has fallen 6 percent since then.
The drop oil prices has meant sharp losses for energy companies, but it gave airlines a boost as investors anticipated lower fuel costs.
Bond yields declined again, which hurt banks, but helped dividend payers such as makers of household goods.
Wall Street also focused on quarterly results from retailers.
Gap Inc plunged after it said its namesake brand is still struggling, but Foot Locker Retail Inc soared after it said sales of premium shoes improved.
Energy companies and oil prices had made big gains lately and were due to slow down, US Bank Wealth Management chief equity strategist Terry Sandven said, adding that a growing global economy is going to help the industry in the long term.
Over the past month that growth, and the strong company profits that come with it, have not translated into gains for stocks.
That could change when firms start reporting their second-quarter results in July, Sandven said.
The S&P 500 on Friday slid 6.43 points, or 0.2 percent, to 2,721.33, but rose 0.3 percent from 2,712.97 on May 18.
The Dow Jones Industrial Average on Friday fell 58.67 points, or 0.2 percent, to 24,753.09, rising 0.2 percent from a close of 24,715.09 a week earlier.
The NASDAQ Composite on Friday climbed 9.42 points, or 0.1 percent, to 7,433.85 as consumer-focused companies moved higher. That was an increase of 1.1 percent from 7,354.34 on Friday last week.
The Russell 2000 index of smaller-company stocks on Friday lost 1.29 points, or 0.1 percent, to close at 1,626.93, edging up 0.02 percent from 1,626.63 on May 18.
US markets are to be closed tomorrow for Memorial Day.
Increased oil production and lower prices could reduce profits for energy companies.
Exxon Mobil Corp fell 1.9 percent to US$78.71 and Chevron Corp gave up 3.5 percent to US$122.19.
Among airlines, Delta Air Lines Inc gained 2.7 percent to US$55.87 and American Airlines Inc rose 3.1 percent to US$44.91. The stocks have skidded over the past few months as the rising price of oil increased their fuel costs and cut into their profits.
Delta stock is flat this year and American Airlines has fallen 14 percent.
Falling US bond yields helped household goods makers break out of their recent struggles.
Toothpaste maker Colgate-Palmolive Co added 2 percent to US$63.75 and cereal maker Kellogg Co rose 2.7 percent to US$65.23.
Gap dropped 14.6 percent to US$28.15 following a drop in sales for Gap brand stores. It has been shifting focus away from the namesake brand, because it is not connecting with shoppers and has struggled to separate itself from rivals. Gap’s Old Navy and Banana Republic brands fared better.
Elsewhere, discount retailer Ross Stores Inc gave up 6.8 percent to US$77.34 after it gave disappointing forecasts for the current quarter and the full year.
Foot Locker blew past estimates and said sales of premium shoes continue to improve, which has been a major concern for it and other sporting goods companies. The stock jumped 20.2 percent to US$54.74.
Shoe Carnival Inc leaped 20.7 percent to US$31.80 after it beat expectations in the first quarter. It also said athletic shoe sales improved.
Additional reporting by staff writer
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