Investors grappled in choppy trading trying to wrestle onto gains on Tuesday as the major indexes traded in positive territory for most of the day before selling off putting them in the red and rallying late into the close. At the close the Dow finished +0.35%, the S&P 500 +0.01% and the Nasdaq rose +0.45%.
The late afternoon sell off in stocks came about as Light Sweet U.S crude prices fell below $50 a barrel before extending declines to close at $45.91. The decline was caused on reports of an over-supply in the market following rising inventory data from the U.S and Russia combined with weaker sign of economic growth and flattening demand for oil. Additionally, the threat of a government shutdown also spooked investors as it seems the U.S government can’t agree on the funding for the proposed border wall.
It comes to no surprise that the Energy index was the worst performing S&P 500 sector falling -2.35 percent with losses in Exxon Mobil (XOM) and Chevron (CVX) falling by more than 2 percent while Apache (APA) and Hess Corp (HES) fell by more than 4 percent feeling the move lower a little more than their peers in the industry. See Light Sweet Crude Oil futures daily chart below.
Most of the tech stocks rebounded as Facebook (FB), Apple (AAPL), Amazon.com (AMZN), Netflix (NFLX) and Alphabet (GOOGL), collectively known as FAANG, gained between 1.3 percent and 3.1 percent. Boeing (BA) shares rose +3.8 percent after raising its dividend and increasing share buybacks to $20 billion from $18 billion. Philip Morris (PM) shares went into a free-fall declining -7.65% after Credit Suisse downgraded the stock to under-perform from neutral citing the cigarette maker’s reliance on heated tobacco products. See PM daily chart below.