Reuters: Wall Street drops after Saudi attacks, energy stocks spike17 September 2019 | 00:51 | FOCUS News Agency
The attacks on the world’s biggest crude exporter sent oil prices up more than 20% before they eased, as various nations said they would tap emergency reserves to ensure stable supplies.
The S&P 500 energy index .SPNY, a gauge of one of the worst performing sectors so far this year, soared 3.3%, its largest one-day gain since January. Shares of Apache Corp (APA.N), Helmerich and Payne (HP.N) and Cimarex Energy (XEC.N) jumped between 12% and 17% and led gainers on the S&P 500.
The Saudi-led military coalition battling Yemen’s Houthi movement said the attacks were carried out with Iranian weapons, raising the prospect of a global conflict involving the United States and Iran.
“The U.S. investor is waiting with bated breath about what the U.S. and its allies might do,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
Anticipation of higher fuel costs drove down shares of airlines and cruise line operators with the S&P 1500 airlines index .SPCOMALI shedding 2.1%, while Carnival Corp (CCL.N) fell 3.2%.
The S&P 500 retailing index .SPXRT lost 1.4%, with retailers, which would be hurt by higher fuel prices, among the biggest drags on the S&P 500.
“The drone strike in Saudi has had an impact on how investors are looking at the security and stability of the global energy supply chain and is fueling a degree of risk reassessment,” said Peter Kenny, founder of Kenny’s Commentary LLC and Strategic Board Solutions LLC in New York.
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