By JOE McDONALD, AP Business Writer
BEIJING (AP) — Global financial markets declined for a second day Wednesday after weak crude prices dragged down energy stocks on Wall Street.
KEEPING SCORE: In early trading, France’s CAC-40 fell 0.5 percent to 5,249.15 and London’s FTSE 100 shed 0.4 percent to 7,413.74. Germany’s DAX lost 0.3 percent to 12,739.01. On Wednesday, the CAC-40 fell 0.4 percent, while the DAX and the FTSE-100 both slipped 0.3 percent. On Wall Street, the future for the Standard & Poor’s 500 index was off 0.2 percent and that for the Dow Jones industrial average was off 0.1 percent.
ASIA’S DAY: The Shanghai Composite Index declined 0.3 percent to 3,147.45 and Tokyo’s Nikkei 225 lost 0.1 percent to 20,110.51. Hong Kong’s Hang Seng gave up 0.1 percent to 25,674.53. Sydney’s S&P-ASX 200 gained 0.7 percent to 5,706.00 and India’s Sensex was up 0.6 percent to 31,458.07. Seoul’s Kospi added 0.5 percent to 2,370.37 and benchmarks in New Zealand and Taiwan also gained. Manila and Jakarta declined.
WALL STREET: Energy stocks dived as oil dropped to its lowest price since last summer. Gains for health care and technology stocks helped reduce losses for broader market indexes. The S&P 500 lost 0.1 percent and the Dow fell 0.3 percent. The Nasdaq composite rose 0.7 percent. Energy stocks in the S&P 500 tumbled 1.6 percent, a day after falling 1.2 percent. They are down nearly 15 percent for the year, when the overall S&P 500 is up 8.8 percent.
OIL PRICES: The price of oil has dropped more than 20 percent this year, breaking into what traders call a bear market. On Wednesday, crude dropped for a third straight day and touched its lowest price since August on expectations supplies will exceed demand. That helps big consumers such as China and other Asian manufacturers but hurts the ability of exporting countries to pay their bills. Accelerating corporate profits have been a big reason for rise in U.S. stock prices this year, and energy companies had been forecast to provide some of the biggest gains.
ANALYST’S TAKE: “Falling oil prices continue to dampen sentiment in global macro markets,” said Citigroup in a report. U.S. credit spreads are rising and concern in currency markets is increasing, they said. “Falling oil prices also hurts sentiment towards the higher-yielding emerging markets, but a steep drop in the price of oil usually spreads bearish sentiment more broadly.”
ENERGY: Benchmark U.S. crude lost 11 cents to $42.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 98 cents on Wednesday to close at $42.53. Brent crude, used to price international oils, fell 16 cents to $44.66 in London. It plunged $1.20 the previous session.
CURRENCY: The dollar declined to 111.03 yen from Wednesday’s 111.37 yen. The euro retreated to $1.1163 from $1.1170.
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