Wall Street fell on Monday as slumping crude prices pushed down energy shares.
At the close in New York, all the three benchmark indexes were down 0.6% to 0.7%. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 117 points to 17,731; the S&P 500 (INDEXSP:.INX) dropped 15 points to 2,077, while the Nasdaq Composite (INDEXNASDAQ:.IXIC) retreated 40 points to 5,102.
Oil futures slipped nearly 5% to below $38 a barrel after the Organization of the Petroleum Exporting Countries’s decision on Friday to keep crude production running at current levels.
CONSOL Energy (NYSE:CNX) sank 15% to 6.56. Devon Energy (NYSE:DVN) and Chesapeake Energy (NYSE:CHK) surrendered 7.8% to $4.20.
US mid-session wrap
While European markets seem largely to have taken heart from US markets' big gains on Friday, US stocks have turned south.
The prospect of OPEC increasing its output quotas in 2016 has opened a trap-door under the oil price, resulting in heavy losses on the likes of CONSOL Energy (NYSE:CNX), Devon Energy (NYSE:DVN) and Murphy Oil (NYSE:MUR), all of which shed more than 7%.
Not surprisingly, the benchmarks are under the truncheon with the Dow Jones down 156 points at 17,692, the Nasdaq Composite down 48 at 5,094 and the S&P 500 off 20 points at 2,072.
It has been an active day for announcements from the pharmaceuticals sector with two prime examples of how trial results can make or break a company.
Xbiotech (NASDAQ:XBIT) was up 41% after it unveiled positive results from a Phase III cancer drug trial in Europe.
In contrast, Threshold Pharmaceuticals (NASDAQ:THLD) came close to being wiped out, losing 83%, after two separate trials for cancer drugs failed to meet their primary endpoints.
Smith & Wesson (NASDAQ:SWHC) was wanted, rising 6.7% to US$20.26, as traders gambled that the government will place restrictions on the availability of semi-automatic weapons, thus obliging gun enthusiasts to switch to owning pistols and rifles instead.
US open
In defiance of pre-market expectations, profit takers have moved in after Friday's handsome gains.
The S&P 500 was down 12 points at 2,080 after 45 minutes' trading while the Nasdaq Composite was off 31 points at 5,111 and the Dow Jones was down 106 points at 17,742; all three benchmarks were off 0.6%.
Shareholders of Keurig Green Mountain (NASDAQ:GMCR) have been offered a “Get out of jail free” card by Luxembourg-based investment firm JAB Holding.
The shares of the single-serve coffee machine maker, which have taken an absolute hammering this year, shot up 38% to US$89/54 as JAB unveiled a US$92 a share offer that values Keurig at around US$13.9bn.
Despite today's rise, the shares remain down a third on the year.
Elsewhere on Nasdaq, Xbiotech (NASDAQ:XBIT) surged 42% after positive results were announced in a European study Phase III study for its breakthrough therapy for colorectal cancer.
In contrast, Threshold Pharmaceuticals (NASDAQ:THLD) plunged 83% after the outcomes of its two Phase 3 cancer studies (MAESTRO and TH-CR-406/SARC021) of evofosfamide did not meet their primary endpoints of improving overall survival with statistical significance.