Stocks - Oil Sector Routed in Premarket as Saudi Declares Price War

By Geoffrey Smith

Investing.com -- Stocks in focus in premarket trade on Monday. March 9th. Please refresh for updates.

8:33 AM ET: Boeing (NYSE:BA) stock was down 10.1% at a three-and-a-half-year low after The Wall Street Journal reported that U.S. air-safety regulators are poised to order it to re-route electrical wiring inside its 737 MAX jets before allowing it to fly again. The issue, which had previously been flagged by European regulators, is the latest complication and potential delay for the return of the 737 MAX to commercial service. 8:28 AM ET: Apple (NASDAQ:AAPL) stock was down 7.6%, underperforming the broader market, as its high liquidity made it one of the easier stocks to sell. Chinese government data released earlier showed the Apple had sold fewer than 500,000 iPhones in China in February, down 60% from over 1.27 million a year ago.

The figures fleshed out the scale of the disruption to Apple’s retail business from the coronavirus. The company had chosen not to give a new sales estimate for the quarter when it warned in February that it wouldn’t meet its original target.

8:19 AM ET: Tesla (NASDAQ:TSLA) stock fell 13.8% to $606, as January’s bubble continued to deflate. The stock is now down just over 38% from its all-time high. The 38.2% Fibonacci retracement, which would normally act as a reliable support level, is at just over $598.80. 8:14 AM ET (1208 GMT): Aon (NYSE:AON) stock fell 2.7%, outperforming the broader market, after announcing its agreement to combine with Willis Towers Watson (NASDAQ:WLTW) in an all-stock deal that brings together the second- and third-largest insurance brokers. Aon said it expects some $800 million of annual synergies within three years of the deal completing, of which some $267 would accrue already in year one. That would make the deal immediately earnings-accretive. Oilfield services providers were the biggest victims of Saudi Arabia’s decision to launch an all-out price war in the crude oil market. Halliburton (NYSE:HAL) stock fell 24% and Schlumberger (NYSE:SLB) stock fell 21.2%, Saudi's price offensive threatens the viability of many of the two service providers’ clients, and will also force even stronger oil and gas producers to cut back heavily on upstream spending. Shale producers were routed across the board in the wake of Saudi Arabia’s move. Continental Resources (NYSE:CLR) stock was down 32.6%, while Whiting Petroleum (NYSE:WLL) stock was down 31.3%. Diamondback Energy stock and Devon Energy (NYSE:DVN) stock fell 23% and 25%, respectively. Exxon Mobil (NYSE:XOM) stock fell 15.7% to its lowest since 2003. Exxon is notionally better protected from the Saudi move because of its extensive downstream operations. Chevron (NYSE:CVX), another integrated major, saw its stock fall 15.6% to its lowest since 2015. Pure play refiners Phillips 66 (NYSE:PSX) and Valero (NYSE:VLO) were among the best-insulated against the rout, falling 7.7% and 8.9% respectively.

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