Stocks ended Monday’s session lower amid a sharp spike in oil prices. The Dow lost 142 points to snap an eight day winning streak. The S&P 500 and Nasdaq Composite both lost 0.3%. The losses follow the major averages capping off their third consecutive week of gains.
Over the weekend, coordinated drone strikes on Saudi Arabia’s crude production facilities shut off roughly 5% of the world’s supply, sparking concern on the impact to economic growth. WTI crude jumped 14.8% to $62.90/barrel and rose as much as 15.5% in intra-day trading, the largest single day move for crude oil since December 2008. Energy stocks rallied amid the jump in oil prices with Exxon Mobil rising 1.5% and Chevron gaining 2.2%.
Eight of 11 S&P 500 sectors traded lower with Materials and Consumer Discretionary the worst performing groups. The defensive Real Estate and Utility sectors along with Energy bucked the downturn. In corporate news, General Motors lost 4.3% amid a worker strike caused by the failure to agree on a new contract. Amazon slipped 1.7% after the e-commerce giant altered its algorithm to favor certain brands.
Perceived “safe haven” assets advanced as COMEX gold added 0.4% to $1,499.50/ounce. Treasuries strengthened sending the yield on the 10-year note dropping six basis points to 1.84%. This follows last week, when Treasury yields saw their largest advance in six years, with the yield on the 10-year note rising 34 basis points for the week.