Market Overview

The Energy Sector Reflects Equity Market Weakness

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The Energy Sector Reflects Equity Market Weakness

In the energy sector, weakness is being witnessed in petroleum and natural gas stocks, while oil service companies are treading in positive waters. Oil stocks are rising against the backdrop of a decline in the broad market today.

The Dow Jones Industrial Average plunged 0.41%, or 43.16 points, to 10,366.30, led by surprising employment claims data. The NYSE Arca Oil Index dropped 0.2% to 968 and the NYSE Arca Natural Gas Index declined 0.14%. The Philadelphia Oil Service Index slipped 0.13%.

Shares of troubled BP PLC (NYSE: BP) shed 0.05% by 1:22 pm. The company met with President Obama and agreed to put aside $20 billion in an escrow account for the Gulf oil spill damages. Tony Hayward, BP CEO, testified on Capitol Hill today.

Following the news, the company faced a double downgrade by Bank of America Merrill Lynch, which cut the oil giant from “buy” to “neutral,” and by Seymour Pierce, which slashed BP from “buy” to “hold.”

"Whilst we still believe that the asset base is ultimately deep enough to help BP weather the storm, we believe that the measures taken will materially erode BP's competitive advantage," said the broker.

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Posted-In: Bank of America Merrill Lynch Energy Sector Obama Seymour PierceNews Intraday Update Markets Movers

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