Oil price retreats, energy stocks edge lower

Oil price down after big jumps earlier in the week

NEW YORK _ Stocks are inching lower Friday as the price of oil retreats, pulling energy companies down. Tech stocks are edging higher following a strong report from chipmaking equipment company Applied Materials, but retail stocks are sliding further after a disappointing report from department store operator Nordstrom.

KEEPING SCORE: The Dow Jones industrial average lost 53 points, or 0.3 per cent, to 16,360 as of 1:48 p.m. Eastern time. The Standard & Poor’s 500 index was down 3 points, or 0.2 per cent, at 1,914. The Nasdaq composite picked up 11 points, or 0.3 per cent, to 4,498 as tech stocks inched higher.

Stocks have been little changed over the last two days. But thanks to big jumps on Tuesday and Wednesday, the S&P 500 is on pace for its best week of 2016. The Nasdaq, which has plunged 10 per cent this year, is on pace for its best week since July.

ENERGY: Benchmark U.S. crude sank $1.10, or 3.6 per cent, to $29.67 a barrel on the New York Mercantile Exchange. It had climbed 17 per cent over the last week as investors hoped for a deal that would limit oil production. Brent crude, a benchmark for international oils, was down $1.35, or 3.9 per cent, to $32.93 a barrel in London.

That sent oil and gas stocks tumbling. Southwestern Energy dropped $1.31, or 15.4 per cent, to $7.19 and Murphy Oil fell $1.37, or 8.1 per cent, to $15.63.

TECH RISES: Chipmaking equipment company Applied Materials climbed after it reported stronger-than-expected profit and sales. Its stock climbed $1.55, or 9 per cent, to $18.72.

Yahoo rose 69 cents, or 2.3 per cent, to $30.11 after the Internet company said it has created a committee of independent directors and hired advisers as part of an effort to redefine itself. Big shareholders are pushing Yahoo to sell its main Internet business. The company eliminated 15 per cent of its staff earlier this month.

SHOPPING AROUND: Retailers struggled again after holiday-season results from department store operator Nordstrom disappointed Wall Street. The company said its sales were weaker than it expected and its profits were hurt because it had to match discounts offered by competitors.

Nordstrom gave up $3.57, or 6.8 per cent, to $49.15 while Macy’s fell $1.17, or 2.8 per cent, to $39.96. Retail stocks also stumbled Thursday after Wal-Mart reported weak quarterly sales and cut its forecasts for the year.

Department stores have struggled since they disclosed weak third-quarter results in November. Nordstrom is down 24 per cent since its report a little more than three months ago.

V.F. Corp, the company behind brands such as Vans, North Face and Timberland, also dropped after its profit and sales fell far short of analyst estimates. The stock dropped $2.38, or 3.9 per cent, to $58.87.

DEERE DOWN: Agricultural equipment company Deere lowered its sales forecast for the year as sales of farm and construction remain weak. That cancelled out first-quarter results that were better than analysts expected. Deere stock lost $2.96, or 3.7 per cent, to $77.37.

NEED A DRINK: Boston Beer Co., the maker of Samuel Adams beer, fell after its sales disappointed investors. The stock gave up $3.56, or 1.9 per cent, to $180.87.

SIGNS OF INFLATION: The Labor Department said prices for consumer goods have risen 1.4 per cent over the last year, a sign that the pace of inflation is picking up.

The combination of a strong dollar and cheaper oil has suppressed inflation across much of the economy, but prices of other goods have been rising.

THE QUOTE: Michael Scanlon, managing director and portfolio manager for John Hancock Asset Management, said consumers are still spending plenty of money on cars, homes and travel even though some retailers are struggling. He thinks that spending is going to grow.

“People feel more stable in their jobs with increasing wages (and) home prices continue to rise,” he said.

Gas prices are also very low, and while consumers have mostly saved that money instead of spending it, Scanlon thinks that’s going to change. Gas prices have stayed low for more than a year, and he thinks shoppers will start to trust that pump prices are going to stay depressed.

PAID OFF: WageWorks stock added $1.50, or 3.6 per cent, to $43.56. The provider of health, commuter and other employee benefits reported stronger-than-expected quarterly results.

OVERSEAS: European stocks fell as the leaders of Britain and the rest of the 28-country European Union entered a second day of talks on how to reform the country’s membership in the bloc. The talks are stalled over a series of issues, including immigration rights.

Germany’s DAX fell 0.8 per cent, while France’s CAC 40 and Britain’s FTSE 100 both declined 0.4 per cent. Asian stocks were mixed, as Japan’s benchmark Nikkei 225 lost 1.4 per cent and South Korea’s Kospi added 0.4 per cent. Hong Kong’s Hang Seng fell 0.4 per cent and the Shanghai Composite in mainland China inched down 0.1 per cent.

METALS: The price of gold increased $4.50 to $1,230.80 an ounce and silver fell 5.9 cents to $15.373 an ounce. Copper held steady at $2.068 a pound.

BONDS, CURRENCIES: Bond prices ticked lower. The yield on the 10-year Treasury note rose to 1.75 per cent from 1.74 per cent. The euro rose to $1.1129 from $1.1094 Thursday. The dollar fell to 112.36 yen from 113.57 yen.

The Canadian Press