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Monday, April 12, 2021

U.S. stocks veer lower following another drop in price of oil

U.S. stocks headed for another lower close in late-afternoon trading Monday, as a slump in crude oil prices and other commodities pulled down stocks. Energy companies were among the biggest decliners as the price of crude oil sank to the lowest level in more than a decade. Investors also weighed the implications of another drop in China’s stock market.

KEEPING SCORE: The Dow Jones industrial average lost 63 points, or 0.4 percent, to 16,283 as of 3:13 p.m. Eastern time. The Standard & Poor’s 500 index shed 13 points, or 0.7 percent, to 1,908. The Nasdaq composite fell 48 points, or 1.1 percent, to 4,594. The market losses come after U.S. stocks posted their worst week in more than four years.

THE QUOTE: “Investors have one eye on China, and all that’s going on there, and the other eye on oil,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank. “Those two things are keeping investors on pins and needles right now.”

ENERGY: Benchmark U.S. crude dropped $1.75, or 5.3 percent, to $31.41 a barrel in New York. The last time it was lower was Dec. 5, 2003, when it closed at $30.73 a barrel. Brent crude, a benchmark for international oils, fell $2, or 6 percent, to $31.55 a barrel in London.

OIL DRAG: Several energy and mining companies slumped as crude oil and other commodity prices fell. Freeport-McMoRan sank $1.08, or 19.9 percent, to $4.33, making it the biggest decliner in the S&P 500 index. Consol Energy also slumped, losing 74 cents, or 9.7 percent, to $6.95. NRG Energy shed $1.08, or 9.5 percent, to $10.26, while Marathon Oil fell 74 cents, or 7.2 percent, to $9.61.

MISSED THE MARK: Celgene fell 6.8 percent after the biotechnology company’s forecasts for 2015 and 2016 fell short of Wall Street projections. The company also named a new CEO. The stock lost $7.38 to $101.60.

WORRISOME UPDATE: Prescription drug distributor McKesson slid 10.6 percent after the company said weakening prices for generic drugs are hurting its business. The stock lost $19.40 to $162.99.

DONE DEAL: Irish drugmaker Shire announced its long-rumored agreement to buy U.S.-based rival Baxalta for about $32 billion in cash and stock. The boards of both companies have agreed to the deal, and they expect it to close in the middle of the year. Shire slid $3.52, or 8.2 percent, to $39.25. Baxalta fell $1.23, or 3.1 percent, to $38.78.

HEALTHY OUTLOOK: HCA Holdings climbed 5.1 percent after the hospital operator raised its profit forecast. The stock added $3.25 to $67.53.

SECTOR VIEW: Seven of the 10 sectors in the S&P 500 index moved lower. Energy stocks fell the most, 2.9 percent. Consumer staples stocks, which were up 0.5 percent, led the gainers.

ROUGH WEEK: U.S. stocks are coming off their worst-ever opening week of a year and the biggest weekly slide since September 2011. The slump came as a weakening of China’s currency and steep drops in its stock market stoked worries over the outlook for the world’s second-largest economy.

OVERSEAS: European markets were down. Germany’s DAX slipped 0.2 percent, while the CAC-40 in France lost 0.5 percent. The FTSE 100 index of leading British shares slid 0.7 percent. In Asia, Chinese stocks sank again after a rebound Friday that analysts suggested was due to buying from a group of state entities dubbed the “National Team.” The Shanghai Composite Index fell 5.3 percent and Hong Kong’s Hang Seng sank 2.8 percent. Sydney’s S&P/ASX 200 lost 1.2 percent, while Seoul’s Kospi fell 1.2 percent. Tokyo’s markets were closed for a holiday.

METALS: Gold fell $1.70 to $1,096.20 an ounce, while silver fell 5 cents to $13.86 an ounce. Copper dropped 5 cents, or 2.4 percent, to $1.97 a pound.

BONDS AND CURRENCIES: Bond prices fell. The yield on the 10-year Treasury note rose to 2.16 percent from 2.12 percent late Friday. The euro fell to $1.0875 from $1.0903 and the dollar edged down to 117.51 yen compared with 117.67 yen late Friday.

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