Stocks slip as oil, worries surge after Saudi Arabia attack
NEW YORK (AP) — Stock markets around the world took an apprehensive step backward Monday after an attack on Saudi Arabia's biggest oil processing facility sent the price of oil surging.
The attack, which Yemeni rebels said they were behind, raised worries about the risk of more disruptions for oil. President Donald Trump warned that the United States was "locked and loaded" to respond as his administration pinned the blame for the attacks on Iran.
Crude prices soared 10%, while prices for Treasurys, gold and other investments seen as less risky rose.
The S&P 500 was down modestly, and stocks across the New York Stock Exchange were nearly evenly split between winners and losers. Energy stocks climbed with the price of oil, while airlines and other companies that have big oil and fuel bills were sharply lower.
The stock market has been volatile since the summer, as worries waxed and waned about the U.S.-China trade war. The move for stocks has been higher the past few weeks, boosted by renewed optimism about easing tensions between Washington and Beijing, and the S&P 500 had climbed back within 1% of its record.
KEEPING SCORE: The S&P 500 dipped 0.2%, as of 10 a.m. Eastern time, after paring a loss that hit 0.5% shortly after trading opened.
The Dow Jones Industrial Average fell 73 points, or 0.3%, to 27,146, and the Nasdaq composite slipped 0.3%. Small stocks in the Russell 2000 index were better performers, and it climbed 0.3%.
ENERGY SPIKE: The attack in Saudi Arabia caused a big disruption to oil supplies, but only a temporary one. Other countries can release some of the oil supplies they've built up in reserves to make up for the loss, analysts said. The bigger threat is the worry about more attacks in the future.
"At a time when oil markets have been in the shadows of a weak global macroeconomic backdrop, the attack on critical Saudi oil infrastructure calls into question the reliability of supplies from not just one of the largest net exporters of crude oil and petroleum products but also the country that holds most of the world's spare production capacity," Barclays analyst Amarpreet Singh wrote in a report.
Benchmark U.S. crude jumped more than $5 to $60.11 per barrel. Brent crude, the international standard, rocketed up $6.22 to $66.44 per barrel.
That helped energy stocks in the S&P 500 surge 3.1%, the only sector among the 11 that make up the index to rise. Marathon Oil gained 9.2%, Devon Energy rose 8.1% and oilfield services provider Halliburton climbed 8%.
PAIN AT THE PUMP: Airlines have huge fuel bills, and any rise in the price of oil can hurt them. American Airlines Group, which spent $3.7 billion on fuel and taxes in the first half of the year, fell 5.6% for one of the biggest losses in the S&P 500.
United Airlines lost 2.9%, and Delta Air Lines lost 2.8%.
Cruise ships also burn lots of fuel, and Carnival lost 2.6%.
STRIKE ONE: General Motors sank 2.1% after more than 49,000 members of the United Auto Workers went on strike. The union and company have been locked in contract talks, and it wasn't clear how long the walkout would last.
WEEK AHEAD: The week's headline event is the Federal Reserve's meeting on interest rates. Investors are confident the central bank will cut short-term rates by a quarter of a percentage point to a range of 1.75% to 2%. It would be the second such cut in two months, as the Fed tries to protect the economy from a global slowdown and the effects of the U.S.-China trade war.
MARKETS ABROAD: European markets mostly fell, and France's CAC 40 was down 0.6%. Germany's DAX lost 0.5%, and the FTSE 100 in London slipped 0.3%.
Trading in Asia was mixed. The Hang Seng in Hong Kong fell 0.8%, the Kospi in South Korea rose 0.6% and Chinese stocks in Shanghai were virtually flat.
AP Business Writer Joe McDonald contributed from Beijing.