S&P 500 returns to negative territory
29 Dec 2011
A five-day rally in US equities ended abruptly with energy stocks leading a sell-off, putting the S&P 500 back in negative territory for the year.
The S&P 500 closed down 1.3 per cent at 1,249.64.
According to analysts, with only two trading days left in 2011, the benchmark US index, which is down 0.6 per cent for the year, would at the end of December, historically one of the best months of the year, be only a 0.2 per cent higher.
Energy and material stocks were the worst hit as the price of oil fell for the first time in seven days.
Oil explorers Nabors Industries and Chesapeake Energy were down 4.1 per cent at $17.41 and 3.7 per cent at $22.66 respectively.
Investors in oil refining companies, whose margins come under a squeeze when the price of crude oil inputs rise faster than petroleum prices, appeared to catch on to the fact that the price of crude was back up to around the $100 a barrel mark. Tesoro was down 4.2 per cent at $23.07 for the worst performance in the S&P 500. Valero Energy was off 2.3 per cent to $20.77.
In the materials sector, Californian rare earth metal miner Molycorp was down 14.1 per cent at $24.04, following the Chinese government raising its export quota for rare earths, which put downward pressure on prices.
According to data from Bloomberg, internet businesses next year may be expected to raise $11 billion with Facebook hitting the market with the largest-ever internet IPO.