Signs of progress in fighting a massive wildfire in Canada put a stop to a rally in crude oil on Monday, and U.S. financial markets paid the price. No one ever accused them of empathy.
Because it posed a threat to oil-production sites, the disaster buoyed the price of crude, which has been in the doldrums because of a global supply glut. The blaze hindered more than 1 million barrels in daily production capacity -- about a third of Canada's output -- as 11 producers and three pipeline operators were forced to limit operations.
"Some reports indicate that the fires in Canada may be moving away from critical oil production facilities and that the weather may be aiding the firefighting effort," said Randy Frederick, managing director of trading and derivatives at Schwab Center for Financial Research, who noted that it had been a "rather unusual day for oil."
West Texas Intermediate crude oil dropped 2.7% to $43.44 a barrel after topping $45 earlier in the session. Erratic trading in the commodity led to a mixed session on Wall Street.
Krispy Kreme (KKD) led consumer stocks higher after agreeing to be acquired by JAB Beech in a deal worth about $1.35 billion. JAB Beech offered $21 a share in cash, a 25% premium to Krispy Kreme's Friday close. The deal is expected to close in the third quarter.
Tyson Foods (TSN) - Get Tyson Foods, Inc. Class A Report was also boosting the consumer staples sector, climbing 1.5% after beating second-quarter estimates and boosting its full-year outlook. The meat producer said it expects full-year profit between $4.20 and $4.30 a share, up from previous guidance of $3.85 to $3.95.
Other consumer stocks including Anheuser-BuschInBev (BUD) - Get Anheuser-Busch InBev SA/NV Sponsored ADR Report , Unilever (UL) - Get Unilever PLC Sponsored ADR Report and CVS Health (CVS) - Get CVS Health Corporation Report were all higher, while the Consumer Staples Select Sector SPDR ETF (XLP) - Get Consumer Staples Select Sector SPDR Fund Report rose 0.3%.
In other earnings news, Sotheby's (BID) - Get Sotheby's Report added 6% despite reporting a steeper-than-expected loss in its first quarter. The auction house said it had a loss of 41 cents a share, far wider than a loss of 7 cents in the year-ago quarter as well as analysts' projections for a loss of 26 cents this year. Net auction sales fell 35% from an especially favorable first quarter last year.