Oil Plunge of 7% Dominates Worldwide Stock Trading

Nichole Harper
28 Nov, 2014
New York City

Trading in oil dominated and the sharp fall in oil price hovered stock and currency trading in New York, Europe and Asia. Crude oil plunged as much as 7% after OPEC left its production level at 30 million barrels a day and the oil price fell to a four-year low.

[R]1:30 PM New York – Trading in oil dominated and the sharp fall in oil price hovered stock and currency trading in New York, Europe and Asia. Crude oil plunged as much as 7% after OPEC left its production level at 30 million barrels a day and the oil price fell to a four-year low.[/R]

Stocks on Wall Street traded slightly higher and major averages struggled to hold near the best levels in the shortened session.

The sharp fall in oil price continued for the second day in a row and West Texas Intermediate Crude future declined to as low as $67.82 a barrel before recovering to close at $68.96 or down 7%.

The selling in crude oil futures was brisk and the prices fell from the high of $73.50 a barrel to as low as $67.75 in less than an hour, after traders digested the OPEC decision to not cut production yesterday.

Consumers were out shopping on Black Friday and searched for bargains in stores and online and the fall in oil price only put more money in the pockets of shoppers.

Shoppers looked for bargains in electronics, apparel, shoes, toys and games and other accessories.

The National Retail Federation projected a 4.1% gain in retail sales in November and December, the biggest increase in holiday sales since 2011.

The survey conducted by the industry group has been unreliable and rarely matches with the actual data released after the holiday period by retailers.

On Wall Street trading, Tollbooth Index extended record level and increased 0.7% or 74.48 to 10,098.90.

S&P 500 index edged up 0.79 or 0.04% to 2,073.64 and the Nasdaq Composite Index gained 19.96 or 0.4% to 4,807.37.

U.S. Movers

American Airlines Group Inc surged 7.7% or $3.46 to $48.44 and Delta Air Lines Inc ((DAL)) soared 5.3% or $2.36 to $46.60 after oil price declined to a four-year low.

EOG Resources Inc ((EOG)) tumbled 7.4% or $6.97 to $87.10 after the oil is slumped to its cheapest in more than four years below $70 a barrel after OPEC decided to hold supply level at 30 million barrels.

Saudi Arabia fended off calls from several member nations to cut production despite several reports suggesting that the demand increase is stalling and the supply is ahead of the demand by at least one million barrels a day.

JetBlue Airways Corporation ((JBLU)) climbed 9.2% or $1.25 to $14.84.

The company expected to generate more than $400 million annual operating income on an annual basis and reduce capital expenditures by more than $900 million from 2017.

European Markets

In London trading, FTSE 100 index fell 0.2% or 15.19 to 6,708.23 and in Frankfurt the DAX index slid 0.1% or 11.51 to 9,963.36.

In Paris, CAC 40 index decreased 0.3% or 12.45 to 4,369.89.

Covidien Plc, the Ireland-based healthcare company received the U.S. Federal Trade Commission clearance of Medtronic`s planned $43 billion acquisition on the condition to sell rival''s drug-coated balloon catheter business in Ireland.

E.ON SE, the Germany-based energy solution provider agreed to sell 80% stake worth $650 million in two wind farms in the United States to Canada-based Enbridge Inc to lower its €31 billion or $38.6 billion debt burden and free up cash reserves.

Separately, today the company agreed to sell its Spanish business to Australia-based Macquarie Group Ltd and a Kuwaiti state fund for about €2.5 billion or $3.12 billion, the Wall Street Journal Deutschland reported.

Vivendi SA, the France-based communications and entertainment provider closed the sale of mobile carrier SFR to domestic cable company Numericable, a subsidiary of Altice''s for €13.37 billion.

The company said it will use the proceeds to lower its debt.

Asian Markets

Stocks in Tokyo gained and the yen eased after retail sales rose 1.4% and industrial production unexpectedly gained in Japan.

Airlines in Tokyo gained after crude oil prices trade near $70 a barrel. The yen weakened for the first time in four days. Toyota said global vehicle production in October decreased 1.1%.

Market indexes in Tokyo closed higher and extended weekly advance after a barrage of economic reports showed weak housing market, decline in jobless rate and household spending fell more than expected.

The yen eased after retail sales data fell below expectations and the attest oil plunge contributed to worries that the Bank of Japan will struggle with accelerating inflation.

The crude oil futures plunged more than $4 a barrel after OPEC left its daily production target at 30 million barrels at a meeting in Vienna, Austria; despite the calls from Venezuela, Iran and Libya to trim production.

The Nikkei 225 Stock Average climbed 211.35 or 1.2% to 17,459.85 and the broader Topix index jumped 18.44 or 1.3% to 1,410.34.

For the week, Nikkei 225 increased 0.9% and for the month surged 13.4%.

The yen slipped 0.1% to 117.47 against one dollar.

In Mumbai trading, the Sensex Index climbed 255.08 or 0.9% to close at 28,693.99. The CNX Nifty jumped 94.05 or 1.1% to 8,588.25.

For the week, the Sensex and the CNX Nifty increased 1.2% and for the month, the Sensex soared 6.6% and the CNX Nifty surged 6.9%.

September quarter GDP growth in India slowed to 5.3% from 5.7% increase in the previous quarter, according to the data released by the statistics office in New Delhi.

Weakness in industrial production dragged the overall economy and growth in the first-half to September increased to 5.5% from the 4.9% rise in the year ago period.

Alstom T&D India Limited advanced 1.9% to Rs 472.70 after the power generation company won a contract worth €7 million or Rs 56 crore from Ceylon Electricity Board, Sri Lanka.

ITC Limited rose 0.6% to Rs 363 and the diversified conglomerate said company plans to invest about Rs 9,000 crore to expand its hotel chain.