Dow falls 150 in open, DuPont plunges 6%
U.S. stocks opened sharply lower Friday as oil continued to decline and investors digested data and corporate news.
In oil markets, Brent crude traded below $39 a barrel on Friday morning, down 1.2 percent, while U.S. crude was near $36.33 a barrel, down about 1 percent.
DuPont , Dow Chemical — the two U.S. chemical giants officially agreed to merge in an all-stock deal to form a combined company valued at $130 billion. The new firm, to be called DowDuPont, is expected to eventually separate into three entities.
Also in focus was news that New York-based Third Avenue Management is blocking investors from withdrawing their money from a near $1 billion junk bond fund as it tries to liquidate the fund in the biggest failure in the U.S. mutual fund industry since the Primary Reserve Fund “broke the buck” during the 2008 financial crisis.
Dow futures were off more than 200 points ahead of the open.
November retail sales rose 0.2 percent. Ex-autos, retail sales rose 0.4 percent. Taking out autos, gasoline, building materials and food services, retail sales increased 0.6 percent after an unrevised 0.2 percent gain in October.
“Bottom line, it’s good to finally see an upside surprise to retail sales but the pace is still pretty mediocre outside of autos,” Peter Boockvar, chief market analyst at The Lindsey Group, said in a note
U.S. producer prices unexpectedly rose in November as the cost of services increased, but the underlying trend continued to point to weak inflation pressures, Reuters said. The Labor Department said on Friday its producer price index advanced 0.3 percent after falling 0.4 percent in October.
Treasury yields held lower, with the 2-year yield near 0.92 percent and the 10-year yield below 2.20 percent.
The U.S. dollar traded flat against major world currencies, with the euro around $1.094. The yen was at 121.60 yen against the greenback as of 8:34 a.m., ET.
Business inventories and consumer sentiment are also scheduled for release at 10:00 a.m.
On tap this week:
10 a.m.: Consumer sentiment; business inventories
1 p.m.: Rig count
*Planner subject to change.