Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average finished down Monday, snapping an eight-day winning streak, after oil prices surged following an attack on two key Saudi Arabian oil facilities.
- Shares of BP (BP - Get Report) , Exxon Mobil (XOM - Get Report) , Chevron (CVX - Get Report) and other energy companies climbed following the drone attacks on the two Saudi Arabian facilities. BP is Real Money's Stock of the Day.
Wall Street Overview
Stocks finished down Monday, ending the Dow Jones Industrial Average's eight-day winning streak, after oil prices saw the largest one-day jump in more than two decades following an attack on two key Saudi Arabian oil facilities.The Dow ended down 143 points, or 0.52%, to 27,077, the S&P 500 dropped 0.31%, and the Nasdaq slipped 0.28%.
The drone attacks on the Abqaiq and Khurais crude facilities in Saudia Arabia caused massive fires and shuttered nearly 5% of global production. Some U.S. officials blamed Iran for the attacks and President Donald Trump said he was "locked and loaded" for a response "depending on verification."
Trump said later Monday that it appears Iran was responsible for the attack, according to CNBC, adding that the U.S. doesn't want war, but is prepared for it.
Remember when Iran shot down a drone, saying knowingly that it was in their "airspace" when, in fact, it was nowhere close. They stuck strongly to that story knowing that it was a very big lie. Now they say that they had nothing to do with the attack on Saudi Arabia. We'll see?— Donald J. Trump (@realDonaldTrump) September 16, 2019
Jim Cramer, founder of TheStreet, said the impact of the drone attacks will "blow over," thanks to U.S. production gains. "Yes, it is surprisingly easy to attack facilities with drones," Cramer said. However, "I think only the lack of infrastructure in Corpus Christi Texas and the inability to put up enough pipelines from the Permian is keeping us from stabilizing the market immediately."
Brent crude contracts were up $7.53, or 12.50%, to $67.75 a barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were rising $6.94, or 12.65%, to $61.79 a barrel.
"Even with these attacks and the rise of oil prices weighing on the stock market, the impact on the U.S. economy is set to be limited, with the U.S. being the top oil producer and energy accounting for only 2.5% of household consumption (down from 8% in the 1970s)," said LP Financial in a note. " Surging oil prices would do the most damage to countries that rely on energy imports, including China and Japan."
The International Energy Agency said in a statement that it was "monitoring the situation in Saudi Arabia closely."
"We are in contact with the Saudi authorities as well as major producer and consumer nations," the IEA said n a statement. "For now, markets are well supplied with ample commercial stocks."
Global airline stocks also retreated in light of the attacks, as worries about rising oil prices prompted concern that jet-fuel costs are likely headed higher. Air carriers such as American Airlines (AAL) , Delta Air Lines (DAL - Get Report) , and JetBlue Airways (JBLU - Get Report) all fell.
General Motors (GM - Get Report) shares tumbled 4.3% to $37.19 after nearly 50,000 members of the United Auto Workers Union went on strike in a move that could shut down production at the biggest U.S. carmaker for several days.Industrial data from China showed output growth slowing to a 17.5-year low in August, weakening to 4.4% in August, as the trade was with the U.S. escalated. Readings on both retail sales and fixed asset investment growth also worsened.