U.S. stocks had a shaky start this morning. Both the Dow and S&P were down more than 0.22%. Nasdaq had gained 0.13% before noon. Gold was trading for $1178.40 per ounce up 0.43%.
Crude oil futures were down 2.54% to $52.62 per barrel. Since many industrial chemicals are refined from oil, the manufacturing sector benefits from lower prices. Lower prices also allow for cheaper flight tickets. Goods are cheaper because it reduces the cost of the transportation sector. These cost reductions are typically passed on to the consumer, which means greater discretionary income for consumer spending. However, now that the U.S. has increased its oil production, low prices can adversely affect American oil companies and workers. The resurgence in U.S. oil production has made it difficult to view drops in the price of oil as positive.
Manjul Bhusal Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.