NEW YORK: Energy-related stocks were hammered on Friday (Nov 28), leaving US stocks mostly flat in a holiday-shortened session, after OPEC decided not to cut production in response to lower crude prices.
The Dow Jones Industrial Average closed up 0.49 points, barely creeping to a new record high at 17,828.24.
The broad-based S&P 500 slid 5.27 points (0.25 per cent) to 2,067.56, while the tech-rich Nasdaq Composite Index edged up 4.31 points (0.09 per cent) to 4,791.63.
The markets, which were closed on Thursday for the Thanksgiving Day holiday, shuttered three hours early at 1pm (2am Singapore time).
US oil prices dropped to a new four-year low after the Organization of the Petroleum Exporting Countries decided to maintain the status quo on output despite a decline in oil prices of more than 35 per cent since June.
Dow members ExxonMobil and Chevron lost 4.2 per cent and 5.4 per cent, respectively. Oil services titan Halliburton plummeted 10.9 per cent, while independent producer Continental Resources tanked 19.9 per cent. The weakness rippled into the industrial sector, with Dow member Caterpillar losing 4.9 per cent.
But the oil price drop had an upside, as airline stocks gained on expectations that lower fuel costs would boost profits. United Continental soared 8.2 percent, American Airlines jumped 7.9 percent and Delta Air Lines gained 5.5 percent.
Leading retailers also were lifted as the kickoff of the annual holiday shopping season coincided with an OPEC decision that many analysts see as a boost to consumers’ disposable income.
Dow member Wal-Mart Stores bolted 3.0 per cent higher. Target added 2.6 per cent, Macy’s gained 2.2 per cent and Best Buy rose 1.7 per cent.
Bond prices rose. The yield on the 10-year US Treasury dipped to 2.19 per cent from 2.23 percent Wednesday, while the 30-year fell to 2.91 per cent from 2.94 per cent. Bond prices and yields move inversely.