Energy shares tumble on concerns about higher production in Iran, China’s economy
Energy companies in the U.S. tumbled on concerns about Iran boosting oil production and refreshed worries about Chinese economic growth, The Wall Street Journal reported.
The Dow Jones Industrial Average slipped 20 points to 17196 in midday trading, and the S&P 500 edged down 0.1%. Energy companies were the biggest drag on the S&P 500, falling 2%.
The Nasdaq Composite, which has a lighter oil-and-gas company weighting, rose 0.4%.
Crude oil fell 2.6% to $46.50 in recent trading, pressured in part by comments from Iran’s oil minister on Monday that he expects the country to boost production by 500,000 barrels a day in the coming months. China’s report that its economy grew 6.9% in the third quarter also weighed on oil prices amid concerns about a slowdown in the world’s second-biggest oil consumer.
While the growth rate of China’s economy has fallen to its weakest level since 2009, the indicator was slightly better than expected. Economists polled by The Wall Street Journal had forecast China’s third-quarter growth at 6.8%.
“Relief is the key word for markets today,” said Darren Ruane, head of fixed interest rates strategy at Investec Wealth & Investment, which oversees about $43 billion in assets. Weaker Chinese growth data would have likely caused a stock market selloff, he said.
The Stoxx Europe was up 0.3%, while Asian markets were mixed.