US stocks were lower at midsession on Wednesday after oil prices sank by 3% as two oil economies paid the price of a climate of depressed energy revenues.
The market bellwether S&P 500 index was down 0.6% to 2,163. Among its top decliners was Murphy Oil Corp (NYSE:MUR), down 4.3% to $27.10.
The S&P Midcap 400 was down 0.7% at 1,559, with Denbury Resources (NYSE:DNR) among the top decliners of 2.9% to $3.01.
The S&P Smallcap 600 was down 0.9% to 749 with decliners including Bonanza Creek Energy Inc (NYSE:BCEI) down 7.3% to $1.02.
Oil exporters got a wake-up call to the effects of lowly oil prices. OPEC member Nigeria’s economy slumped into recession while Norway’s stalled in the second quarter, data showed on Wednesday.
Oil has recovered from February's low of just over $26 per barrel but the current price of about $46 is still less than half what producers were getting just two years ago.
The West Texas Intermediate, the US oil price gauge, was down 3.4% at $44.76.
US open
US stocks opened lower, weighed down by lower oil prices while private jobs numbers from ADP came in better than expected and fuelled worries over higher interest rates.
Companies added 177,000 positions in the month, which was just above Wall Street expectations for 175,000.
The Dow Jones Industrial Average shed 69 at 18,385, the S&P eased nine to 2,167 while Nasdaq was 17 points lower at 5,206.
The ADP number is no longer seen as a reliable guide to the non-farm payrolls due later this week, but that it was close to estimates and the market is worried a strong jobs number will spur the US Federal reserve to raise interest rates.
Oil stocks were weak as Chevron and Exxon Mobil tumbled on a weak oil price and US inventories came in higher than expected.
US preview
US stocks are seen opening lower as traders await the non-farm job creation numbers at the end of the week and the oil price is on the slide.
The jobs data will be closely scrutinised as it could signal the timing of the next Fed rate hike.
The general mood is that Fed chair Janet Yellen will raise interest rates on September 21 at a time when the majority of the rest of the Central Banks are pursuing stimulus measures amid stagnant growth.
And the ADP private payroll data is already out. This is largely seen as a precursor to Friday's report.
Companies added 177,000 positions in the month, which was just above Wall Street expectations for 175,000.
On Wall Street, the Dow closed down 48 at 18, 454.
The S&P500 closed down 4.26% to 2,176, while the tech heavy Nasdaq lost 9.3 points at 5,222. The S&P Midcap 400 shed 0.1% to 1,568. The S&P Smallcap 600 posted a flat end at 755.
In futures trading today, the S&0500 is down three points; the Nasdaq is down 6.5 and the Dow Jones Industrial Index is 29 points lower.
Apple (NASDAQ:AAPL) shares nudged 0.6% lower in pre-market after yesterday's ruling by the European Commission, ordering the Irish gov't to get US$14.5 billion plus interest in taxes from Apple. Ireland and the tech giant have said they will appeal.
US crude is 0.91% lower, at US$45.91 a barrel.