S&P 500 Down 1%, Third Weekly Price Decline in Oil

Nichole Harper
18 Dec, 2015
New York City

S&P 500 index declined nearly 1% and for the week trimmed gains to 0.5% and extended 2015 loss to 1.8%. The widely followed index was down on the ongoing weakness in energy and industrial sectors.

[R]11:55 AM New York City, New York – S&P 500 index declined nearly 1% and for the week trimmed gains to 0.5% and extended 2015 loss to 1.8%. The widely followed index was down on the ongoing weakness in energy and industrial sectors.[/R]

Stocks struggled in New York trading and market indexes traded lower on the option, derivatives and futures expiry.

On the “quadruple witching” Friday, about $1.2 trillion worth options on stocks and indexes and futures on indexes and individual stocks are set to expire.

In volatile trading, market indexes accelerated decline near mid-day but investors remained hopeful of a final two week traditional rally in stocks.

On Wall Street, Tollbooth Strategy Index dropped 140.98 or 1.3% to 10,639.62.

S&P 500 index dropped 18.69 or 0.9% to 2,023.33 and the Nasdaq Composite Index slumped 29.55 or 0.6% to 4,973.36.

In addition, oil was in focus after the most widely traded commodity was set to decline for the third week in a row.

Crude oil has fallen nearly 30% from its high in October and declined 42% so far in the year.

Crude oil in New York rose 34 cents to $35.29 a barrel and gold soared $13.87 to $1,064.97 an ounce.

U.S. Movers

Bristol-Myers Squibb Co ((BMY)) slipped 62 cents to $68.80 after the biopharmaceutical products maker signed two separate deals with ViiV Healthcare, a global HIV company of GlaxoSmithKline Plc, to divest its pipeline of investigational HIV medicines for about $1.5 billion.

The both the transactions are expected to close during the first-half of next year.

CarMax, Inc ((KMX)) plunged 7.7% or $4.43 to $52.73 after the used vehicles dealer said revenues in the third-quarter ending in November soared 4.1% from a year ago to $3.54 billion.

CarMax stock plunged after the company missed earnings outlook of 65 cents a share and revenues expectations of $3.63 billion.

Used unit sales in comparable stores fell 0.8%, total wholesale unit sales jumped 3.4% and total used unit sales advanced 3.2%.

Net income in the quarter dropped 3.6% to $128.2 million or 63 cents per diluted share compared to $130 million or 60 cents per share from the same quarter last year.

“We had a challenging sales quarter, which together with higher advertising expenses”, said chief executive officer Tom Folliard.

Wells Fargo & Co ((WFC)) decreased 1.5% or 83 cents to $54.64 after the financial services provider agreed to sell its crop insurance business, Rural Community Insurance Services to the subsidiary of Zurich Insurance Group, Zurich American Insurance Company.

The financial details was not disclosed by Wells Fargo but industry analysts estimated the deal size between $670 million and $1 billion.

The transaction is expected to close by the end of the first-quarter of next year.

European Markets

European stock markets declined on Friday as the ongoing concerns over global growth outlook, declining oil and commodity prices, overshadowed the rate hike in the U.S. earlier this week.

The EU28 seasonally adjusted external current account recorded a surplus of €19.8 billion in October 2015, compared to surplus of €19.7 billion in September 2015 and €10.8 billion in October 2014, according to preliminary estimates from Eurostat.

In London trading, FTSE 100 index fell 21.17 or 0.4% to 6,081.29 and in Frankfurt the DAX index slipped 124.73 or 1.2% to 10,613.28.

In Paris, CAC 40 index dropped 31.86 or 0.7% to 4,623.11.

For the week, FTSE 100 index jumped 2.1% and the DAX index advanced 2.6% and the CAC 40 index increased 1.6%.

GlaxoSmithKline Plc fell 0.3% to 1,337 pence after the U.K. pharmaceutical company agreed to pay $1.46 billion to Bristol-Myers Squibb for its HIV drugs in two separate deals.

GlaxoSmithKline will pay $317 million for Bristol’s late-stage HIV drugs and additional $518 million, depending on development and commercial milestones.

GlaxoSmithKline will also pay $33 million for Bristol’s early-stage HIV medicines and $587 million upon reaching certain milestones.

Both transactions are expected to close during the first-half of 2016.

RWE Npower HOLDINGS Plc, the power supply company, was fined £26 million by the U.K. regulator for sending inaccurate bills and for poor handling of complaints between 2011 and 2014.

The billing issues affected more than 500,000 customers and generated more than 2 million complaints.

UK regulator Ofgem said the £26 million would be divided between the worst affected customers and charity.

Asian Markets

The Nikkei 225 average declined 1.9% today and fell 1.3% in the week. The Bank of Japan kept its monetary stimulus unchanged and proposed a new ETF purchase program. Kumiai Chemical net soared 115%. Oracle Corporation Japan profit rose 3%.

Tokyo stocks declined across most sectors as investors took profit taking after a 2-day rally.

Nikkei averages and other indexes rallied briefly after the Bank of Japan released its new purchase plan of exchange-traded funds.

The central bank announced a new ETF purchase program with an annual budget of 300 billion yen. The program starts in April, 2016, and aims to neutralize the market impact of selling shares that the ce had purchased from banks.

The Bank of Japan decided to keep its monetary stimulus unchanged at 80 trillion yen in asset purchases annually, indicating confidence in the economy, at its December monetary policy meeting.

The average maturity of Japanese government bond holding is extended to between 7 and 12 years.

Kumiai Chemical net soared 115% and Oracle Corporation Japan profit rose 3%.

The Nikkei 225 Stock Average declined 366.76 or 1.9% to 18,986.80 and the broader Topix index dropped 27.61 or 1.8% to 1,537.10.

For the week, Nikkei 225 decreased 1.3%.

The yen slipped against the dollar to 122.05.

Sensex index declined for the first time in five days and pared weekly gains after software services exporters retreated and resource linked stocks and banks were in focus.

Software services exporters declined after U.S. lawmakers proposed to increase fees for worker visas. The proposed bill is looking to curtail number of visas issued to software developers.

The public sector banks traded higher after the Reserve Bank of India on Thursday unveiled new math for banks’ base rate.

Oriental Bank of Commerce soared 5.2%, IDBI Bank Ltd surged 5% and Union Bank of India jumped 3.4%.

Rupee rose 3 paisa to ₹66.39 against one U.S. dollar.

The Sensex Index decreased 284.56 or 1.1% to close at 25,519.22. The CNX Nifty fell 82.40 or 1.1% to 7,761.95.

For the week, Sensex Index gained 1.6% and CNX Nifty advanced 2%.

Germany-based ERGO Insurance Group plans to increase its stake in insurance joint venture with HDFC to just below 49%.