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US stocks drop after Saudi attacks, energy stocks witness a fall

saudi drone attack

Stocks in the United States dropped after the global economy was shaken by the attacks on crude facilities in Saudi Arabia. The attacks took place on the weekends which impacted and they involved 5 percent of the globe’s supply. However, the impact of the drop in US stocks was reduced by energy stocks which rose because of a significant increase in crude prices.

There was a 20 percent increase in oil prices after the attacks took place on the world’s largest exporter of oil. The prices eased after multiple countries announced that they would use emergency reserves in order to avoid wild fluctuations in supply.

The energy sector has been having quite a rough time during this year. However, the S&P 500 energy .SPNY increased by 2.36 percent recently. Shares of various energy companies like Marathon Oil Corp MRO.O, Apache Corp and Hess Corp experienced gains. 

One of the major concerns is that the rise in oil prices may result in reduced spending on other commodities, said Rick Meckler, a partner at Cherry Lane Investments.

Investors pulled from shares of cruise lines and airlines operators as the oil prices were anticipated to rise. There was a 2 to 5 percent decline in shares of American Airlines Group Inc., Carnival Corp and Delta Air Line Inc.

At 11:34 AM ET, the Dow Jones Industrial Average stood at 27,086.13, down by 0.49 percent. Similarly, the S&P 500 reduced by 0.35 percent. 9 sectors out of 11 at the S&P fell down. 

Other stocks that fell include that of General Motors Co which lost 3.1 percent after its workers from United Auto Workers union went on a strike on Sunday. 

The market experiences many fluctuations as shown by the S&P index which reported 4 new highs and 1 new low in the 52-week period. On the other hand, Nasdaq reported 32 and 17 new highs and lows. 

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