US: Stocks drop as oil equities tumble

[NEW YORK] US stocks fell on Monday with petroleum-linked equities retreating on a big drop in oil prices as Wall Street girds for a busy week of economic reports.

The Dow Jones Industrial Average fell 91.66 points (0.52 per cent) to 17,598.20.

The broad-based S&P 500 shed 5.80 (0.28 per cent) at 2,098.04, while the tech-rich Nasdaq Composite Index lost 12.90 (0.25 per cent) at 5,115.38.

Dow members ExxonMobil and Chevron lost 1.5 per cent and 3.3 per cent, respectively, while Marathon Oil lost 2.1 percent as US crude prices plummeted 4.1 per cent to US$45.17 a barrel.

US data showed slightly weaker manufacturing activity and a modest gain in consumer spending. Investors are especially focused on Friday's jobs report for July.

Some technology stocks finished lower including Apple (-2.4 per cent), Netflix (-1.6 per cent), and Tesla Motors (-2.3 per cent). Social networking companies LinkedIn (-3.0 per cent) and Twitter (-5.6 per cent) fell, adding to their declines following disappointing earnings last week.

General Motors (+0.5 per cent) and Ford (+0.7 per cent) rose after reporting better-than-expected July US auto sales.

Coal companies fell after President Barack Obama unveiled tough new carbon-dioxide reduction targets aimed at power producers. Consol Energy lost 7.6 per cent, while Peabody Energy shed 9.2 per cent.

Tyson Foods slumped 9.9 per cent after slashing its 2015 earnings forecast to US$3.10 - US$3.20 per share from the prior US$3.30 - US$3.40 estimate due to the financial hit in its beef business from elevated cattle costs.

Telecom company Frontier Communications gained 9.0 per cent as second-quarter revenue rose 19.3 per cent to US$1.37 billion. Frontier said it was on track to complete a deal to buy Verizon's wire line operations in California, Florida and Texas.

Soap and household goods manufacturer Clorox rose 2.7 per cent after reporting net income increased 11 per cent in the quarter ending June 30. It projected flat-to-one per cent growth in sales in fiscal 2016.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.15 per cent from 2.19 per cent on Friday, while the 30-year dropped to 2.86 per cent from 2.91 per cent. Bond prices and yields move inversely.

AFP