Oil Stocks Lose Ground as Crude Prices Fall

Major U.S. equities indexes pushed higher on the first day of the new trading week as the markets brace for a slew of earnings reports. Big tech will likely be in focus, with five of the so-called “Magnificent Seven” companies set to release results throughout the week.

This week will also bring key updates on inflation, housing, and manufacturing, culminating with Friday’s release of the October jobs report. Investors will likely be keeping a close eye on the economic and labor market data ahead of next week’s Federal Reserve policy meeting.

The S&P 500 and the Nasdaq both closed Monday’s session around 0.3% higher. The Dow jumped 0.7%, boosted by outperformance from several constituents in the financial sector.

Shares of Albemarle (ALB), the world’s largest lithium producer, surged 5.0%, securing the day’s best performance in the S&P 500. Late last week, the U.S. government approved a new lithium mining project in Nevada to be operated by Australia-based competitor Ioneer (IONR). Analysts said the first lithium mine to be greenlighted under the Biden administration represents a key step forward for U.S. ambitions to boost domestic lithium production and reduce reliance on China for the key EV battery component.

Hopes for a de-escalation in heightened tensions in the Middle East contributed to a steep drop in crude oil prices on Monday. The prospect of lower fuel costs provided a boost to companies in the travel industry. Shares of cruise operator Carnival (CCL) sailed 4.8% higher. Shares of other cruise companies as well as airlines also posted gains.

Shares of industrial and consumer goods conglomerate 3M (MMM) jumped 4.4% after JPMorgan lifted its price target on the stock. Analysts were upbeat on the third-quarter earnings report released last week by the maker of Scotch Tape and Post-it Notes, praising 3M’s margins and stable sales performance while noting expectations for modest sales growth.

The decline in oil futures prices pressured oil and gas stocks. Shares of exploration and production company APA Corp. (APA) tumbled 4.5%, suffering the biggest decline of any stock in the S&P 500. APA’s peers also lost ground—Diamondback Energy (FANG) shares dropped 3.4%.

Centene (CNC) shares slipped 3.9%, reversing some of the strong gains posted by the stock in the previous session after the managed care and health insurance provider reported better-than-expected sales and profits for the third quarter. Although Centene managed to boost its premium and service revenue and membership rolls, analysts said the company faces persistent pressure related to its Medicaid business.

Shares of medical device maker ResMed (RMD) fell 3.6%. Similar to Centene, the downtick for ResMed stock marked a reversal from gains posted late last week after the company beat quarterly sales and profit estimates. However, questions linger about the potential impact of blockbuster weight-loss treatments on demand for ResMed’s sleep apnea treatment devices.