Wall Street up for sixth straight week despite a plummet in oil prices
Despite oil prices plunging US stocks ended flat on Friday and major indexes rose for a sixth straight week. The Dow Jones Industrial Average closed at 17,828.24, up by only 0.0027 percent.
The Dow surged to 17,893 just just before noon then falling to 17,808 and rebounding a bit to 17,828.24 at close.
Crude oil dropped by 7 percent to below $68 per barrel a day (the biggest one day drop since May 2011) following OPEC’s decision not to reduce oil production, which is going to leave the markets oversupplied.
Tony Roth, chief investment officer at Wilmington Trust, who oversees USD 80 billion in assets, said:
“Crude seems to have no floor right now, and we could easily see the price drop into the low USD 60s,”
The worst performing S&P index was the energy index, which fell by 6.3 percent. Exxon Mobil Corp dropped by 4.2 percent to $90.54 and Chevron Corp fell 5.4 percent to $108.87. QEP Resources, Newfield Exploration, and Denbury Resources all fell by more than 15 percent.
A drop in oil prices is promising for airlines though, as fuel costs will drop. Southwest Airlines increased by 6.5 percent to $41.82 and Delta Air Lines gained 5.5 percent to $46.67.
Retailers also benefited, with Wal-Mart Stores Inc rising by 3 percent to USD 87.54. The S&P 500 Retailing index gained 1.4 percent.
Other major gainers include Procter & Gamble Co., which rose by 1.55% closing at $90.43, and Home Depot Inc., which increased by 1.74% closing at $99.40.
“This low should be very additive to economic activity, not just with gas prices but across the economy. Early holiday shopping numbers should come in pretty strong.”
The S&P 500 dropped by 0.25 percent to 2,067.56, while the Nasdaq Composite gained 4.31 points to 4,791.63.