Stocks are lower and oil prices have jumped following a drone attack on Saudi oil facilities on Saturday that knocked out more than 5% of global oil supply and halted output of more than half of Saudi Arabia's daily exports. President Trump has warned the U.S. is "locked and loaded" to respond, without naming who is seen as to blame, while two of his cabinet members blame the attack on Iran. In a tweet, Secretary of State Mike Pompeo said that the U.S. would work with its "partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression." The impact of the move higher in oil prices is reverberating in several sectors, as many oil producers' stocks are rising and transport companies, most clearly the airlines, are sliding.
ECONOMIC EVENTS: In the U.S., the Empire State manufacturing index fell 2.8 points to 2.0 in September, missing expectations for a moderate gain.
WTI crude oil prices are up by a double digit percentage, rising about 12% to above $61 per barrel in late morning trading following the drone strike against production plants in Saudi Arabia.
In China, several measures of economic activity – including industrial production, fixed asset investment, and retail sales – came in weaker than expected in August.
TOP NEWS: Oil-linked stocks, from the largest to the smallest, are rising alongside the spike in brent and WTI crude oil prices. Exxon Mobil (XOM) and Chevron (CVX) are up 1.5% and 2%, respectively, near noon to lead the Dow. Some of the largest percentage movers include Whiting Petroleum (WLL), Denbury Resources (DNR), Extraction Oil & Gas (XOG) and Centennial Resource Development (CDEV).
The United Auto Workers union began a strike against General Motors (GM) after the two sides failed to reach a tentative deal before a Saturday night deadline. The strike by the union, the first since 2007, prompted President Trump to tweet: "Here we go again General Motors and the United Auto Workers. Get together and make a deal!"
MAJOR MOVERS: Among the noteworthy gainers was Alder Biopharmaceuticals (ALDR), which surged 83% higher after it agreed to be acquired by Lundbeck in a deal valued at $1.95B. Also higher was SemGroup (SEMG), which gained 63% after agreeing to be acquired by Energy Transfer LP (ET) in a unit and cash transaction valued at $17 per share, or a total consideration including the assumption of debt of approximately $5B. Energy Transfer shares were about 4% lower after the news.
Among the notable losers was New Relic (NEWR), which slid 6% after cutting its FY20 revenue outlook and announcing the resignations of its chief technology officer and chief revenue officer. Also lower was Lumber Liquidators (LL), which continues to slide by another 7% after founder Tom Sullivan told Bloomberg in an interview on Friday that he will not seek a buyout of the company. Sullivan disclosed in a regualtory filing that he has reduced his stake, saying he believes the stock is no longer undervalued.
INDEXES: The Dow fell 152.23, or 0.56%, to 27,067.29, the Nasdaq lost 34.82, or 0.43%, to 8,141.89, and the S&P 500 slid 13.01, or 0.43%, to 2,994.38.
