U.S. Stocks Wobble as Oil Prices Tumble; Starwood Surges


U.S. markets are about flat Monday as lower oil and gas prices are dragging down energy companies while hotels and other travel-related companies are rising after a consortium led by China’s Anbang Insurance Group offered to buy Starwood Hotels.

KEEPING SCORE: The Dow Jones industrial average added 21 points to 17,234 as of 12:45 p.m. Eastern time. The Standard & Poor’s 500 index lost two points, or 0.1 percent, to 2,019. The Nasdaq composite index picked up five points to 4,753.

LOW ENERGY: Energy was by far the biggest declining sector in the S&P 500. Oil prices slumped after Iran’s oil minister dismissed the idea of a freeze in production over the weekend, saying Iran will keep increasing production until it reaches four million barrels per day.

U.S. benchmark crude fell $1.61, or 4.2 percent, to $36.89 a barrel in New York. Brent crude, the global benchmark, lost $1.19, or 2.9 percent, to $39.20 a barrel in London. Gasoline and heating oil prices both slipped about 2 percent while natural gas prices rose.

Southwestern Energy lost 76 cents, or 9.5 percent, to $7.24 and Chesapeake Energy gave up 42 cents, or 8.9 percent, to $4.28. Financial stocks also fell. They are the worst performing sector of the S&P 500 this year, in part because investors are worried that struggling energy companies will be unable to pay back loans.

BOOK A ROOM: Starwood Hotels jumped after the consortium offered to buy the hotel chain for $14 billion. Last year Marriott International agreed to buy Starwood for $12.2 billion. Starwood said it will examine the offer.

Anbang bought New York’s Waldorf Astoria for almost $2 billion in 2014 and on Saturday it agreed to buy Strategic Hotels & Resorts for $6.5 billion. It’s offering $76 per share for Starwood, which rose $5.22, or 7.4 percent, to $75.64.

Marriott stock rose $1.93, or 2.8 percent, to $70.82. It will get a $400 million payment if Starwood backs out of their agreement. Other travel-related companies also advanced. TripAdvisor gained $3.46, or 5.4 percent, to $67.16 and Expedia rose $2.77, or 2.4 percent, to $117.70.

GROCERY SHOPPING: The Fresh Market jumped $5.47, or 23.8 percent, to $28.45 after private equity firm Apollo Global said it will buy the grocery store chain for $1.3 billion, or $28.50 per share.

OVERSEAS: Stocks in Europe rose after the Eurozone had its biggest monthly increase in industrial production since 2009. Germany’s DAX rose 1.6 percent. France’s CAC 40 added 0.4 percent while Britain’s FTSE 100 rose 0.7 percent.

Chinese stocks rose after the chief of the China Securities Regulatory Commission told a press conference over the weekend that it’s too early to talk about winding back official support measures for the markets, according to the official Xinhua news agency. That suggests the government will continue to support Chinese equities.

Meanwhile Japan reported a jump in private sector machinery orders, a sign that capital spending could improve this year. Japan’s benchmark Nikkei 225 index rose 1.7 percent and South Korea’s Kospi was little changed. Hong Kong’s Hang Seng added 1.2 percent and the Shanghai Composite Index in mainland China gained 1.8 percent.

HIGHER: Drug developer GW Pharmaceuticals more than doubled after it reported positive results from a late-stage study of its drug Epidiolex, an experimental seizure disorder treatment derived from a marijuana extract.

GW Pharmaceuticals stock added $48.46, or 126 percent, to $86.92. Zynerba Pharmaceuticals, which is studying a drug based on synthetic compounds derived from cannabis, climbed $5.91, or 70 percent, to $14.35.

CENTRAL BANKS: On Wednesday the Federal Reserve will conclude its latest meeting. Investors don’t expect the Fed to raise interest rates, but they will look closely at its comments on the state of the U.S. and global economies to get clues about possible moves in the future. In December the Fed raised interest rates for the first time in almost a decade, but it left them unchanged in January.

The Bank of Japan and the Bank of England are also due to meet this week though analysts do not expect any major policy changes. Last week the European Central Bank followed through on its promise to provide more economic stimulus.

BONDS, CURRENCIES: Bond prices rose. The yield on the 10-year Treasury note slipped to 1.95 percent from 1.98 percent. The euro declined to $1.1125 from $1.1157 late Friday. The dollar fell to 113.59 yen from 113.70 yen.