Energy Slump Knocks S&P 500 Futures Off Record

US stocks ended mostly lower on Monday, as plunging energy shares knocked the S&P 500 off record highs.

The Standard & Poor’s 500 Index declined 8.08 points, or 0.4%, to close at 2,268.90. The benchmark gauge opened lower and held in negative territory throughout the day, reflecting weaker futures trading in the pre-market hours.

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The large-cap index rose to fresh record highs on Friday, as volatility fell to the lowest level since the summer. The CBOE VIX, Wall Street’s preferred measure of uncertainty, rose on Monday for the first time in five sessions.

Slumping energy shares were the major catalysts for the weak performance on Wall Street. The S&P 500’s energy index closed down 1.5%, as oil prices plunged to three-week lows.

Crude oil fell nearly 4% in belated response to a report on Friday showing the tenth consecutive weekly rise in active US rigs. Baker Hughes said the active rig count rose by four to 529, the highest in a year.

Other sectors to underperform the market included utilities and telecommunications services, which fell 1.3% and 1.1%, respectively. Shares of consumer staples companies declined 0.7%, while industrials fell by the same amount.

Financals were down 0.8% and real estate slumped 0.6%. Discretionary stocks also slumped.

Health led the gainers, rising 0.4%. Information technology advanced 0.2%.

The Dow Jones Industrial Average fell further below the elusive 20,000 mark. The industrial blue-chip index closed down 76.42 points, or 0.4%, at 19,887.38.

The Nasdaq Composite Index bucked the downtrend, climbing 10.76 points, or 0.2%, to end at a new record of 5,531.82.

Traders are gearing up for an active earnings season that shifts into high gear later this month. S&P 500 earnings are expected to grow 3% year-over-year for the fourth quarter, according to financial data provider FactSet. Analysts have remarked that the pre-announcement season has been quiet, which portends for a positive earnings quarter.

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Sam Bourgi is a financial market analyst for economiccalendar.com. He has more than six years of progressive experience in economic and financial analysis, research consulting and sectoral analysis. As a published author in government, peer-reviewed, online and industry sources, he has developed a fundamental approach to the financial markets with a broad focus on stock indices, commodities and the technology sector. He earned his Bachelor’s Degree from the University of Windsor and Master’s degree from McMaster University.