NEW YORK -- Energy stocks dove again on Wednesday as oil dropped to its lowest price since last summer, extending their dismal start to the year. Gains for health care and technology stocks helped hem in losses for broader market indexes.
The Standard & Poor's 500 index fell 1.42 points, or 0.1 percent, to 2,435.61. The Dow Jones industrial average fell 57.11, or 0.3 percent, to 21,410.03, and the Nasdaq composite rose 45.92, or 0.7 percent to 6,233.95.
"The story truly is energy right now," said JJ Kinahan, chief market strategist at TD Ameritrade.
Crude dropped for a third straight day and touched its lowest price since August on expectations that supplies of oil will far outweigh demand. Even a report showing that the amount of supplies in U.S. inventories shrank last week did little to alter the tide.
The price for benchmark U.S. crude fell 98 cents, or 2.3 percent, to settle at $42.53 per barrel. Brent crude, the international standard, fell $1.20, or 2.6 percent, to $44.82 a barrel.
The price of oil has now dropped more than 20 percent this year, breaking into what traders call a bear market. How much of an impact that will have on most 401(k) accounts will depend on how much it undercuts energy companies' profits, and whether the pain will spill into other areas of the market.
Accelerating corporate profits and expectations that they'll continue have been a big reason for the stock market's rise this year, and energy companies had been forecast to provide some of the biggest gains.
"We're in the warning area here, between $40 and $44," Kinahan said of the price of oil. "If we get below $40, I think you'll get people adjusting their expectations."
Energy company stocks in the S&P 500 tumbled 1.6 percent, a day after falling 1.2 percent. They are down nearly 15 percent for the year, when the overall S&P 500 is up 8.8 percent.
Losses for the broad S&P 500 were milder on Wednesday because of strong gains for health care and technology stocks.
Red Hat, an open-source software company, surged to one of the biggest gains in the index after reporting better-than-expected earnings for its latest quarter. Its forecast for revenue and earnings this fiscal year also topped analysts' expectations. Its stock rose $8.62, or 9.6 percent, to $98.58.
La-Z-Boy jumped $5.80, or 22.1 percent, to $32.00 after reporting quarterly earnings that easily topped analysts' expectations. Its customers have been shifting toward higher-priced and more profitable products for the company, such as leather.
The 10-year Treasury yield held steady at 2.16 percent. The two-year yield dipped to 1.34 percent from 1.35 percent late Tuesday, and the 30-year yield fell to 2.73 percent from 2.74 percent.
In the commodities markets, gold rose $2.30 to settle at $1,245.80 per ounce, silver slipped 4 cents to $16.37 per ounce and copper added 5 cents to $2.60 per pound. Natural gas fell 1 cent to $2.89 per 1,000 cubic feet, heating oil fell 3 cents to $1.36 per gallon and wholesale gasoline fell 1 cent to $1.41 per gallon.
Business on 06/22/2017