Energy’s losses offset tech sector’s gains
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 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 amid 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.
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 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 Wednesday because of strong gains for health care and technology stocks.