NEW YORK ( TheStreet) -- Stocks in the oil-services sector took it on the chin during Friday's trading session, one of the many sectors of the worldwide economy to feel the ripple effects of the announcement from formerly high-flying Gulf state Dubai that it could not meet its scheduled debt payments.

The energy sector as a whole was down 2.7% at the close.

Helmerich & Payne ( HP) was down 3.3%; Halliburton ( HAL) was down 3.7%; and TETRA Technologies ( TTI) had the biggest drop, down close to 6% on Friday. Boots & Coots ( WEL) and Allis-Chalmers Energy ( ALY) were down 4.1% and 5% respectively, at the market close on Friday.

Many of the stocks in the sector are still trading near 52-week highs, but whether that will hold up longer-term could depend on the Dubai effect -- how widespread and for how long the markets sell off, and the overall dent to the global economic recovery as a result of the Dubai debt crisis.

The news out of Dubai comes at a time when some oil industry analysts believe that companies were near fair valuation already, so in the least, an event like this might make it that much harder to expect any more appreciation from the sector in the near-term.

What's more, with some analysts, such as Phil Weiss at Argus Research, believing that oil is actually overvalued by and large, the broad sell-off today and drop in oil prices -- oil futures dropped sharply on Friday morning -- could mean that oil prices will be lower than the consensus view for some time.

"These companies are so tied to oil prices and falling prices hurt them. They really need greater belief in an $80 dollar or above range, and today's events give more credence to the view that prices are too high based on the actual supply/demand situation, which is unfavorable."

Even though Dubai is a Mideast nation, it is not direct exposure to Dubai that will hurt the oil services sector, as not many of the companies have major businesses in the Mideast state. Rather, it is the broader ripples through the economy as a result of the evolving situation in Dubai that could keep the price of oil trading within a range that will be lower than many had been forecasting, and that potentiality is the worst thing for these companies.

-- Reported by Eric Rosenbaum in New York

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