Oil, Stocks Trip on Consumer Data

Oil and equities moved lower after a disappointing July consumer confidence reading.
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) -- Oil futures slumped alongside equities after the Conference Board released sobering news showing consumer confidence hit a five-month low in July.

After trading as high as $79.69 a barrel on Tuesday, the September crude delivery contract lost $1.48, or 1.9% to settle at $77.50 a barrel.

A report released in the morning showed

consumer confidence fell below expectations to read 50.4 in July, down from the 54.3 reading posted the month before. The figure immediately weighed on market sentiment, despite more upbeat news earlier in the morning showing a

better-than-forecast rise in home prices.

"It just continues the cycle of for every bullish report, you'll get two or three bearish reports like the confidence number," said Darin Newsom, DTN Telvent analyst, who highlighted the overvaluation for crude and noted the link today between price movements for oil futures and the major market averages. "From a fundamental point of view, the market hasn't turned around."

After the close of trading on Tuesday, the American Petroleum Institute said crude oil inventories gained 3.08 million barrels in the week ended July 23. Analysts had been looking for a decline of 2.3 million barrels, according to a Platts poll.

On Wednesday, the Energy Information Administration will release its own supply statistics at 10:30 a.m. ET. In addition to the drawdown in crude inventories, analysts are also expecting a build of 1.1 million barrels in gasoline stockpiles and an additional 1.8 million barrels in distillates.

The energy sector was dominated by


(BP) - Get Report

news as the company reported a $17 billion second-quarter loss, propelled by a $32 billion charge related to current and future costs from the Gulf oil spill. BP also confirmed that CEO Tony Hayward will be replaced by current managing director Bob Dudley, who will take the reins of the firm effective Oct. 1. The stock lost 65 cents, or 1.7%, to close at $38.

Fellow integrated player

Occidental Petroleum

(OXY) - Get Report

reported earnings of $1.31 a share, falling just short of the consensus from Wall Street analysts provided by


, calling for a profit of $1.33 a share. The stock finished 3.6% lower at $79.94.

Refining firm

Valero Energy

(VLO) - Get Report

said cost drops and improving sales helped it earn 93 cents a share in the second quarter, besting estimates and marking an official bounce back from the loss posted at the same time last year. Its stock shed 17 cents, or 1%, to $17.39.

Oil-related stocks traded broadly weaker, with both the NYSE Arca Oil index and the Philadelphia Oil Service Sector index down by 0.4%. Shares for the two integrated Dow components, however, finished the session with mild gains.

Exxon Mobil

(XOM) - Get Report

added 42 cents, or 0.7%, to $60.81 and


(CVX) - Get Report

increased by 68 cents, or 0.9%, to $75.30.

On Wednesday morning,


(COP) - Get Report

is expected to report earnings of $1.56 a share and Hess is projected to post a profit of $1.13 a share, according to


. Their shares advanced 0.02% and 1%, respectively.

On the Nymex, the September natural gas contract rose by 6 cents, or 1.4%, to settle at $4.65 per million British thermal units. Meanwhile, both September heating oil and September gasoline shed 4 cents, or 2%. The heating oil contract settled at $2.03 a gallon and the gasoline contract settled at $2.06 a gallon.

--Written by Sung Moss and Melinda Peer in New York