While you were sleeping: Oil slide continues

While you were sleeping: Oil slide continues

By Margreet Dietz

June 22 (BusinessDesk) - Wall Street was mixed amid the ongoing slide in oil prices, which touched the lowest level in 10 months.

West Texas Intermediate for August delivery touched the lowest level since August, while Brent hit the lowest level since November.

"There’s a sea of negativity," Maxwell Gold, director of investment strategy at ETF Securities, told Bloomberg. "This is much more a story of sentiment weighing on the markets."

A US Energy Information Administration report showing crude inventories fell by a higher-than-expected 2.7 million barrels in the latest week failed to bolster sentiment.

"The market wants proof that OPEC cuts are shifting petroleum balances, and it's not getting it," Anthony Headrick, energy market analyst at CHS Hedging in Inver Grove Heights, Minnesota, told Reuters. "Crude prices are now on the hunt to find the stress point for the US producers and we're not there yet."

Oil’s slump weighed on Wall Street. In 3.21pm trading in New York, the Dow Jones Industrial Average fell 0.2 percent. However, the Nasdaq Composite Index rallied 0.7 percent. In 3.06pm trading, the Standard & Poor’s 500 Index slipped 0.1 percent.

The Dow declined as slides in shares of Caterpillar and those of DuPont, recently down 3.2 percent and 2.1 percent respectively, outweighed advances in shares of Nike and those of Merck, recently up 1.8 percent and 1.5 percent respectively.

In Europe, the Stoxx 600 Index finished the session with a 0.2 percent retreat from the previous close. Germany’s DAX Index fell 0.3 percent, and the UK’s FTSE 100 Index also eased 0.3 percent, while France’s CAC40 Index declined 0.4 percent.

Shares of Provident Financial tanked 17.6 percent after the sub-prime lender warned that profit at its consumer credit division is expected to drop this year to about half what it was in 2016, citing “the impact of higher operational disruption on collections performance and sales.”

Meanwhile, Diageo said it agreed to acquire George Clooney's Casamigos, the fastest growing super-premium tequila brand in the US, for up to US$1 billion to bolster its place in the tequila category. Diageo shares closed 0.7 percent lower in London.

“It supports our strategy to focus on the high growth super-premium and above segments of the category," Ivan Menezes, Chief Executive of Diageo, said in the statement. "With the global strength of Diageo we expect to expand the reach of Casamigos to markets beyond the US to capitalise on the significant international potential of the brand.”

Casamigos was created in 2013 by founders Clooney, Rande Gerber, and Mike Meldman.

“The price looks high,” Trevor Stirling, an analyst at Sanford C Bernstein, told Bloomberg. “So much of this depends on their belief in the growth rate of this brand.”

(BusinessDesk)

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