Lipow Oil Associates president Andy Lipow talks about oil prices and how the U.S. will still be the No. 1 oil producer in the world.
The specter of a potential armed conflict with Iran loomed over the stock market Friday which closed with triple-digit losses but off the worst levels of the session.
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The Dow Jones Industrial Average, trimmed a loss of over 300 points, to finish the session at 235.07 or 0.8 percent. The Nasdaq Composite and the S&P 500 slipped around 0.7 percent.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 28634.88 | -233.92 | -0.81% |
| SP500 | S&P 500 | 3234.85 | -23.00 | -0.71% |
| I:COMP | NASDAQ COMPOSITE INDEX | 9020.769795 | -71.42 | -0.79% |
Oil, traditionally the most volatile commodity in times of Mideast tensions, saw upticks most of Friday. West Texas Intermediate crude closed up 3.1 percent at $63.05 a barrel. The global benchmark, March Brent crude saw similar gains with a rise of 3.6 percent and a close at $68.60 per barrel.
Energy stocks, which opened higher as a group, ended the session mixed.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XOM | EXXON MOBIL CORPORATION | 70.33 | -0.57 | -0.80% |
| CVX | CHEVRON CORP. | 121.01 | -0.42 | -0.35% |
| MRO | MARATHON OIL | 13.75 | +0.07 | +0.51% |
| HAL | HALLIBURTON COMPANY | 24.76 | +0.08 | +0.32% |
It was not all bleak on the exchanges as shares of defense contractors Northrop Grumman and Lockheed Martin were up more than 5 percent and 4 percent respectively after the team at Citigroup noted that rising tensions in the region could validate the need for a bigger defense budget.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NOC | NORTHROP GRUMMAN CORPORATION | 375.01 | +19.31 | +5.43% |
| LMT | LOCKHEED MARTIN CORPORATION | 413.74 | +14.37 | +3.60% |
As has happened in the past, investors made a flight to safety amidst rising tension, abandoning anything seen as a risky asset for long-standing safe havens, such as gold and U.S. Treasuries. The yield on the 10-Year slipped to 1.792 percent.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GLD | SPDR GOLD SHARES TRUST – EUR ACC | 145.86 | +1.91 | +1.33% |
In other corporate news, Tesla shares rose to a record after reporting that deliveries exceeded expectations.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 443.01 | +12.75 | +2.96% |
While concern about the Mideast remained paramount, other factors were at play for the market downturn. Minutes of the Federal Reserve’s December meeting were released. While the minutes revealed a sense of optimism regarding the economy and ease in U.S.-China trade tensions, but there were also concerns about slow growth.
To that end, Friday also saw worse-than-expected U.S. manufacturing data. The Institute for Supply Management’s manufacturing purchasing managers index fell to 47.2 percent, its lowest number in more than 10 years.
