Wall Street energy stocks were the main culprits in bringing down tickers on Monday.
Although the day started shabbily with the ISM manufacturing data for July showing expansion decelerated, it was the price of oil which most roiled markets as the session wore on.
The S&P 500 market bellwether was down 0.1% to 2,170, led lower by Diamond Offshore Drilling Inc (NYSE:DO), down 7.7% to $20.98, Transocean Ltd (NYSE:RIG) down 6.7% to $10.25, Murphy Oil Corp (NYSE:MUR) down 6.6% to $25.63, and Devon Energy Corp (NYSE:DVN) down 6.2% to $35.91.
Energy stocks were also the main group pushing mid-caps lower, as the S&P 400 ended down 0.3% to 1,555.
The S&P Smallcap 600 were 0.1% lower at 743 with energy stocks among the top 10 fallers.
But the wider small-cap ticker, the Russell 2000, which lost 0.1% to 1,219, called on tech stock VirnetX Holding Corp (NYSE:VHC) as its biggest faller of 43.9% to $2.43. Read more here.
But the overall downbeat mood of stocks was triggered by oil prices. The West Texas Intermediate, the US oil benchmark slid under the $40 a barrel mark for the first time since April, settling in bear market territory, defined as a 20% drop from a recent high.
The WTI future ended down 3.8% at $40.02 having touched a low of $39.82.
Midsession
US stocks were soft at midsession on Monday as manufacturing output data underwhelmed and oil fell below $40 a barrel.
On the same day as UK manufacturing data sank the FTSE100 ticker in London, so too US manufacturing data upset Wall Street. Although the Institute for Supply Management’s manufacturing index still expanded it did so at a slower pace than in June.
The ISM pulled back to 52.6% in July from 53.2% in June.
The S&P 500 index, the market bellwether, was down 0.2% at 2,168, having tested record highs intraday.
The S&P Midcap 400 was down 0.3% at 1,554, and led south by Wpx Energy Inc (NYSE:WPX), down 9.9% to $9.00 thanks to a fall by oil prices.
The West Texas Intermediate was down 3.9% to $39.97 for the first time since 18 April.
The S&P Smallcap 600 dropped by 0.1% to 742, and led by Insperity Inc (NYSE:NSP), down 14.4% to $67.22 after the staffing services provider announced its second quarter results. In spite of strong results the market had been hoping for even more.
Canadian markets were closed for a public holiday on Monday.
Open
US stocks are seeking direction this morning, as investors mull over two batches of manufacturing data.
The S&P 500 index was a couple of points firm at 2,175 as nine o’clock rolled around, while the mid-market measurement, the S&P 400 was barely changed at 1,559.
At the minnows end of the market, the Russell 2,000 was about a quarter of a point below water at 1,220.
The Institute for Supply Management’s manufacturing index pulled back to 52.6% in July from 53.2% in June, but as the value was over 50 that still indicates expansion.
Meanwhile, Markit’s manufacturing purchasing managers’ index for July rose to an eight month high of 52.9, in line with expectations.
Solar power stocks were in focus, with Trina Solar Limited (ADR) shares (NYSE:TSL) shooting up 26% to US$10.41 as the company announced plans to go private.
SolarCity Corp (NASDAQ:SCTY) tumbled 4.7% to US$25.44 as it succumbed to an offer from electric car maker Tesla Motors Inc (NASDAQ:TSLA).
VirnetX Holding Corp (NYSEMKT:VHC) lost more than two-fifths of its value as it received a setback in the courts in its patent breach case against consumer electronics giant Apple Inc (NASDAQ:AAPL).
Preview
Canada's markets are closed today but US shares on Wall Street are poised to go higher.
Dow Jones futures are 26 up; the Nasdaq futures are over five points to the good and the S&P500 is up 2.5 after shares finished relatively well supported last week.
Oil prices supported the market as it was still lapping up some strong tech sector performance in the second quarter earnings season.
The market bellwether S&P 500 closed up 0.2% , or 3.54 at 2,173 – having marked an intraday record high of 2,177.09, while the Nasdaq closed 7 up at 5,162.
The Dow Jones finished down over 24 at 18,432.
Today, as the new month begins FTSE 100 in London is currently over 17 down at 6,706, while in Asia trading was mixed overnight. The Nikkei 225 added 0.4% to 16,635 and the Shanghai lost 0.87% to 2,953.
Electric car firm Tesla (NASDAQ:TSLA) is in focus again (what a surprise) with shares in SolarCity (NASDAQ: SCTY) up over 5% in pre-market on mutterings it will announce an agreement to merge with the former.
Tesla offered to acquire the solar power group for nearly US$3 billion in June.
Tesla boss Elon Musk owns 22.5% of SolarCity and acts as its chairman. Musk is also a cousin of the two SolarCity co-founders.
On the data front, the Institute for Supply Management will be reporting on the health of the US manufacturing industry at 10 am Eastern Time.