DAL - Crude Weighs on Markets
Stocks fell Tuesday to kick off the first trading day of a holiday-shortened week, weighed by a jump in crude oil prices.
The Dow Jones Industrials moved downward 51.08 points to begin the week at 34,786.63.
The S&P 500 index declined 9.51 points to 4,506.26.
The NASDAQ index dipped 26.6 points to 14,005.21.
Oil prices rose after Saudi Arabia extended its one-million-barrels per day voluntary oil production cuts. West Texas Intermediate futures popped 2% to trade above $87 per barrel, reaching their highest levels since November. The new lifted energy stocks, with the S&P 500 sector last up more than 1.3%. Shares of Halliburton, Occidental Petroleum and EOG Resources added more than 2% each.
The rise in oil prices pressured airline and cruise stocks, with American Airlines, United Airlines, Delta Air Lines and Royal Caribbean last down more than 2% each. Carnival was among the biggest laggards, last down nearly 5%.
Over the extended holiday weekend, Goldman Sachs cut its recession odds to 15% and said it anticipates the Federal Reserve skipping a rate hike at its policy meeting later this month.
While this could be seen as good news for the market, investors have to contend with September's seasonal effects, which historically marks the weakest month for equities.
Prices for the 10-year Treasury sagged, raising yields to 4.25% from Friday's 4.18%. Treasury prices and yields move in opposite directions.
Oil prices climbed $1.54 to $87.09 U.S. a barrel.
Gold prices flopped $15.40 to $1,951.70 U.S. an ounce.