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Oil Skidded 21% During July -- and Was a Big Drag on Stocks

NEW YORK (TheStreet) -- July was a mixed month for markets as the S&P 500 and Nasdaq closed with slight gains, while the Dow Jones Industrial Average saw a loss. 

For the month, the S&P 500 added 1.2% and the Nasdaq gained 1%. The Dow lost 0.4%.

But none suffered more this month than crude oil, which endured its worst losses of the year. West Texas Intermediate crude plummeted 21% over the month in a period which saw an Iranian nuclear deal threaten even more oil on oversupplied markets and global production at record highs. 

Oil's performance on Friday did little to help matters. The commodity tumbled 2.9% to settle at $47.12 a barrel after Baker Hughes data showed the number of U.S. oil rigs rose to 664 from 659 a week earlier. 

Must Read: Warren Buffett's Top 10 Dividend Stocks

Oil was the central theme of Friday for stocks, too. Benchmark indexes closed slightly lower, weighed on by disappointing earnings from major oilers Exxon Mobil (XOM - Get Report) and Chevron (CVX - Get Report)  which triggered a selloff in the energy sector.

 Exxon shares fell nearly 5% after reporting its lowest profit since 2009 and generating sales one-third lower than a year earlier.

Chevron slid 5% after reporting earnings of 30 cents a share, down from $2.98 a share a year earlier. Revenue fell 33% to $36.83 billion but came in slightly above estimates.

Other energy stocks including BP (BP - Get Report) , ConocoPhillips (COP - Get Report) , Statoil (STO - Get Report) and PetroChina (PTR) fell, while the Energy Select Sector SPDR ETF (XLE) slid 2.2%.

"Output from the US is the highest in over thirty years," Schneider Electric analyst Daniel Holder wrote in a note. "This, combined with record production from Iraq ... and concerns over slowing Chinese demand growth continue to pressure prices down."

Money is on a September rate hike from the Federal Reserve but the latest data on wages threw some doubt into the ring on Friday. Wages and benefits rose 0.2% in the second quarter, the smallest gain since 1982, according to the Labor Department's Employment Cost Index. Economists had expected a 0.6% gain over the quarter after a 0.7% increase in the first quarter indicated a pickup in wage growth.

Investors have been on alert for any piece of data that could give the Fed pause in its rate-hiking plans. Consensus had been for the central bank to move off of crises-level rates as soon as September as economic conditions in the U.S. steadily improved.

"Today's report could increase uncertainty about the trajectory of wage growth and dampen expectations for a September hike," BNP Paribas analyst Laura Rosner wrote in a note.

Business conditions in the Chicago region improved markedly in July, according to Chicago PMI data. The measure rose to 54.7 in July from 49.4 in June, and marked the highest level since January.

Consumer sentiment fell to 93.1 in July, down from 96.1 in June, according to data from University of Michigan. Economists had expected the measure to fall at a slower pace to 94.

Royal Caribbean Cruises (RCL) gained more than 8% after beating earnings estimates and reporting an increase in both passenger ticket revenue and onboard revenue over its recent quarter. The cruiseliner company earned 84 cents a share, 9 cents above estimates.

LinkedIn (LNKD) shares were down more than 10% after reporting poor performance from core businesses, primarily display ads. Monthly unique user growth was flat over the quarter at an average of 97 million members.

Amgen (AMGN) shares rose 3% after the biotech earned $2.57 a share in its recent quarter, 15 cents better than expected, on revenue 3.7% higher than a year earlier. Full-year earnings guidance was also increased.

SoulCycle filed to go public. In its IPO filing, the fitness company said it had achieved 73% studio growth from 2012 to 2014 and hopes to raise $100 million through the float.

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SYM TRADE IT LAST %CHG
BP $36.97 -1.88%
COP $50.34 -3.32%
CVX $88.48 -4.89%
STO $16.91 -2.08%
XOM $79.21 -4.58%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

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