Wall Street shares were lower at midsession on Friday as Brexit fears gripped blue-chips and small-caps, but mid-caps were flat to higher after oil prices headed bounced.
The S&P 500 bellwether was down 0.3% at 2,071 while the S&P Smallcap 600 lost 0.2% to 701 and the Russell 2000 shed 0.2% to 1,145.
But the S&P Midcap 400 was unchanged and outperforming other tickers at 1,478, with a host of energy stocks leading the risers, among them Sm Energy (NYSE:SM), up 11.2% at $29.26, as well as Denbury Resources (NYSE:AMD) up 7.8% at $4.27 and Consol Energy Inc (NYSE:CNX) up 8% at $14.59 and Energen Corp (NYSE:EGN) up 5.2% at $47.24.
Still, the top risers of the S&P500 were also energy stocks, such as Transocean Ltd (NYSE:RIG), Chesapeake Energy Corp (NYSE:CHK) and Murphy Oil Corp (NYSE:MUR). The top 10 gainers were dominated by energy stocks.
Expectations that higher oil prices may prompt energy groups to ramp up the pace of drilling gained some credibility on Friday after data showed the number of US oil rigs rose for the third week in a row.
The tally of US oil rigs climbed by 9 this week to 337, the highest since late April, according to data from Baker Hughes.
The report suggests American producers may have grown more bullish as the price of oil has nearly doubled since its February nadir around $25.
But the fear now is that as more capacity comes on stream, so the price of oil will once again decline as the shortages which Goldman Sachs highlighted earlier this month evaporate and return the market to surplus.
The US oil benchmark WTI was up solidly by 3.8% at $47.98. On Thursday, the contract closed just shy of breaking the floor at $46.
Open
Investors have cooled on blue-chips this morning, though mid and small-caps have continued yesterday’s firmer trend.
The S&P 500 was down three points at 2,077.99 towards the end of the first hour of trading, but its baby brother, the mid-cap focused S&P 400 was up six points at 1,485.
“There wasn’t necessarily much to cause that decline [of the blue-chips] bar a relatively weak pair of housing starts and building permits readings,” suggested Connor Campbell at spread betting firm Spreadex.
The Russell 2,000 index, which tracks small caps, limped into positive territory, up 0.7 at 1,149.
Lumber Liquidators Holdings Inc (NYSE:LL) was almost one-fifth higher after it said it had agreed not to resume sales of a laminate wood flooring made in China that was coated with formaldehyde, a known carcinogen, and therefore a cancer risk.
Lumber Liquidators had tested in excess of 1,300 planks and none had levels of formaldehyde above government guidelines, but even so the company has agreed to stop selling the flooring.
On the Nasdaq exchange, Ceres Inc (NASDAQ:CERE) was the top performer as it agreed to a takeover offer from Land O’ Lakes Inc.
The bid has been pitched at 40 cents a share, sending shares in the agricultural biotechnology company surging 75% to US$0.389.
Preview
After recovering from a poor start to finish higher yesterday, investors look to be in wait-and-see mode this morning.
The S&P 500, which rose 6.5 points to close at 2,078 yesterday, is tipped to open a point or so lower.
The Dow Jones average, which jumped 93 points to 17,733 yesterday, is in line for a five point fall.
Gun control advocates will likely be shaking their heads in disappointment this morning at news released last night by guns maker Smith & Wesson Holding Corp (NASDAQ:SWHC) that showed sales of its firearms were up 22% year-on-year in the first quarter.
The shares were trading 10% higher in pre-market trading.
Surpassing that gain was Elizabeth Arden Inc (NADAQ:RDEN), the beauty products firm, which was up almost 48% in electronic trading as it agreed to be bought out by Revlon.