Energy & Commodities
Energy shares jump as crude oil prices climb
Energy stocks gained on Friday as crude oil prices rose. The broad market fell. Citizens Financial beat profit estimates, but its shares edged lower.
Quick Read
- The energy sector fund jumped 2.5% as crude oil prices rose; the S&P 500 slid 1.1%.
- Citizens Financial beat analyst profit estimates but missed on sales, and its shares edged down 0.1%.
- Higher crude prices could lift energy company profits and may also raise fuel costs for households over time.
What happened to energy shares?
The energy sector fund jumped 2.5% on Friday. A sector fund holds companies from one industry, in this case oil and gas producers and related firms. The gain came as crude oil prices rose during the session.
Why it matters: The broad market moved the other way. The S&P 500, the most widely followed gauge of large U.S. stocks, slid 1.1%. The Nasdaq-100 fell 2.5%, and the technology sector fund tumbled 3.0%.
By the numbers: Energy was not the only gainer. The utilities fund rose 1.3% and the consumer staples fund gained 1.1%. Still, decliners outnumbered gainers, with 819 stocks lower and 526 higher.
Why do oil prices matter for these stocks?
Oil producers earn more on each barrel when crude prices rise. That can lift the profits investors expect from the whole sector, and share prices often adjust quickly.
Higher crude can also reach households. Gasoline and heating-oil prices tend to follow crude, usually with a lag. A single day's move does not show whether prices will stay higher.
What did Citizens Financial report?
Citizens Financial Group (NYSE: CFG) reported third-quarter earnings per share above the analyst consensus, the average forecast of analysts who cover the company. Its quarterly sales came in below the consensus, according to its results.
The shares edged down 0.1% to close at $63.36. The sales shortfall may have offset some of the profit beat. The financial sector fund rose 0.5% on the day.
Citizens stock sits 15.2% below its 52-week high of $74.73. That high is the top price the stock reached over the past year.
What comes next?
What’s next: The Fed announces its next interest-rate decision on Oct. 28 at 2 p.m. ET. The October consumer price index, the monthly inflation report, follows on Nov. 10. Energy costs feed into that report, so the path of oil prices could shape how it reads.
For readers
What it could mean for you: People who own an energy sector fund felt Friday's oil move far more than holders of a broad index fund. A fund focused on one industry carries that industry's news with little offset from other holdings. If crude prices stay higher, energy funds could keep benefiting. A reversal in oil could cut into those gains just as quickly. Owners of technology sector funds saw the opposite side of the same session. That group fell while energy rose.
Questions and answers
Why did energy stocks rise on Friday?
Energy shares gained as crude oil prices rose during the session. Higher oil prices can raise the profits oil producers expect to earn.
Did Citizens Financial beat earnings estimates?
Citizens Financial reported third-quarter earnings per share above the analyst consensus, though its quarterly sales came in below estimates. Its shares edged down 0.1% on Friday.
Could higher oil prices raise gas prices?
They could. Gasoline and heating-oil prices tend to follow crude oil, usually with a lag and not always in full.
The numbers
| Citizens Financial (CFG) price | $63.36 |
|---|---|
| Citizens Financial (CFG) change | −0.11% |
| Citizens Financial (CFG) 52-week high | $74.73 |
| S&P 500 change | −1.09% |
| 10-year Treasury yield | 5.09% |
Friday’s close
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Not investment advice.
