Oil slips again, weighing on stocks
Energy stocks slipped again Wednesday as oil dropped to its lowest price since last summer. Gains for health care and technology stocks helped hem in losses for broader market indexes.
The Standard & Poor’s 500 index dipped 0.1 percent, to 2,435.61, and the Dow Jones industrial average fell 0.3 percent, to 21,410.03, but the Nasdaq rose 0.7 percent, to 6,233.95.
‘‘The story truly is energy right now,’’ said JJ Kinahan, chief market strategist at TD Ameritrade.
Crude dropped for a third straight day and touched its lowest price since August on expectations that supplies of oil will far outweigh demand. Even a report showing that US inventories shrank last week did little to alter the tide.
Benchmark US crude lost 2.3 percent to settle at $42.53 per barrel. Brent crude, the international standard, fell 2.6 percent, to $44.82 a barrel.
The price of oil has now dropped more than 20 percent this year, breaking into what traders call a bear market. How much of an impact that will have on 401(k) accounts and other investments will depend on how much it undercuts energy companies’ profits, and whether the pain will spill into other areas of the market.
Accelerating corporate profits and expectations that they’ll continue have been a big reason for the stock market’s rise this year, and energy companies had been forecast to provide some of the biggest gains.
‘‘We’re in the warning area here, between $40 and $44,’’ Kinahan said of the price of oil. ‘‘If we get below $40, I think you’ll get people adjusting their expectations.’’
Energy stocks in the S&P 500 tumbled 1.6 percent, a day after falling 1.2 percent. They are down nearly 15 percent for the year, when the overall S&P 500 is up 8.8 percent.
Losses for the broad S&P 500 were milder on Wednesday because of strong gains for health care and technology stocks.
Red Hat, an open-source software company, surged to one of the biggest gains in the index after reporting better-than-expected earnings. Its forecast for revenue and earnings this fiscal year also topped expectations. The stock rose 9.6 percent.
La-Z-Boy jumped 22.1 percent on earnings that easily topped analysts’ expectations. Its customers have been shifting toward higher-priced and more profitable products.