Slide in energy shares hits US as jittery investors sell
US stocks fell yesterday as energy shares slid after the latest failed attempt to halt the oil spill in the Gulf of Mexico and the US government announced a criminal probe into the disaster.
Investors punished shares of companies directly involved with the spill and losses accelerated into the close following the news of the investigation.
“It’s the fact that no one can really quantify the cost of the BP disaster out there,” said Gary Bradshaw, portfolio manager at Hodges Capital.
US-listed shares of BP, which owns the well, tumbled 15 per cent. Halliburton, which performed some work on the well, lost 14.8 per cent after Goldman Sachs removed the company from its “conviction buy list.” Transocean, which owns the rig, slid 11.9 per cent to $50.04, while the S&P energy index shed 4.3 per cent.
The Dow Jones industrial average dropped 112.61 points, or 1.11 per cent, to 10,024.02. The Standard & Poor’s 500 Index fell 18.70 points, or 1.72 per cent, to 1,070.71. The Nasdaq Composite Index gave up 34.71 points, or 1.54 per cent, at 2,222.33.
On the upside, Apple rose 1.5 per cent to $260.83 as a successful international launch of its iPad prompted analysts to raise earnings estimates. In merger news, ev3 jumped 17.4 per cent to $22.22 after Covidien agreed to buy the maker of stents and other vascular devices for $2.6bn.