U.S. stocks pared back declines on Monday morning as oil prices retreated from multi-year highs hit over the weekend.
The Dow Jones Industrial Average was down around 1.8 percent in the first hour of trading, or around 800 points, before retracing to be down around 500 points, or one percent. The Nasdaq composite was down by around 1.3 percent at the open but those losses were cut to around 0.4 percent by 11 am. The S&P also fell sharply in the first half our of trading but was down by just 0.7 percent by late morning.
Stocks have been responding to a volatile oil market. Overnight, Brent crude futures, the global oil benchmark, briefly climbed above $110 a barrel. On Monday morning, however, it was trading at around $102. That represents a steep increase of nearly 11 percent since last week and is well above the previous three year high of around $95 a barrel.
The energy sector was up by nearly a percentage point on Monday morning and the information sector was flat. The other nine sectors of the S&P 500 were down. Financial were the worst performing sector, followed by consumer distrectionary. Consumer staples and health care were down by less than one-third of a percentage point.
Yields on 10 year Treasuries were up at the opening of trading, likely due to fears that higher energy prices could dissuade the Federal Reserve from cutting interest rates. But by 11 am, they had retreated to being flat for the day. Yields move in the opposite direction of prices, so that a rising yield indicates investors are selling Treasuries.
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