Signs of rising oil production sent crude prices to a seven-month low rumbling Wall Street which retreated from yesterday's record highs.
Oil per barrel plummeted to $42.75 as energy markets continue to grapple with a glut and the additional prospect of US shale producers ramping up production - making the OPEC production cut a seeming non-starter. Crude for July delivery fell 2.2% to $43.23.
Energy stocks as a result led the big board down with biggest decliners Oneok Inc dropping -5.42%, Apache Corp. -4.24%, Transocean Ltd. -4.21%.
Gainers cut across a number of sectors. Vivint Solar, providers of residential solar energy systems, shot up 19.54%, biopharmaceuticals, Kadmon Holdings and Axovant Sciences also rocketed up 7.82% and 7.43% respectively.
- Dow 21,467.14 -0.29%
- S&P 500 2,437.03 -0.67%
- Nasdaq 6,188.03 -0.82%
- Russell 2000 1,402.97 -1.07%
- NYSE Composite 11,739.09 -0.80%
- Gold 1,244.20 +0.06%
- Oil WTI $43.34 -1.95%
10-Year Yield 2.158% +0.03
Chipotle shares hammered
Chipotle's shares tumbled on the NYSE -7.26% after its SEC 8 K filing on Monday showed it would have to increase its marketing spend by up to 3% as well as 'other' potentially slightly higher operating costs. Same store sales would be in the high single digits which was off from analysts' optimistic expectations of around 10%.
Investor confidence recently won back after its food-safety crisis in 2015 with E-coli outbreaks affecting 485 people across 13 states, showed itself to be shaky at best as a sell-off ensued in trading today.
Chipotle once a stock market darling has a market cap of $13.2 bn. It has since down a turnaround pushing its "quality ingredients" and discarding any artificial flavourings or preservatives in order to win back customers and revitalise sales. The reported increase in marketing spend signals that the strategy may need 'beefing' up.
Confidence may ebb currently but market commentators still see a recovery for the company over the long term. It was the most active with trading volumes for today of 3.3 million compared to average daily of 813,000. The company is expected to announce 2nd quarter earnngs in July.
Other political and economic news that grabbed investors' attention was House Speaker Paul Ryan bringing tax reform back to the fore using his speech for the National Association of Manufacturers annual policy summit.
Tax reform and deregulation if it is delivered would give massive impetus to bullish stock markets as it would mean in theory lower tax rates would spur greater consumer spending and business investment.
However, investors seem to have discounted tax reform happening this year as a number of Administration policies such as health care have been stymied.
Ryan set himself apart from the Trump adminstration, which was open to temporary tax cuts, by calling for those cuts to be permanent. Ryan stated that "14 Congressional Acts have been signed into law rolling back "oppressive regulations and estimated that these actions alone could save families and businesses more than $36 bn."
He focused during his speech on the need for simplifying the tax code and building a confident America through a bold agenda for the country that encompasses health care and tax reform among others.
In front of a receptive audience, Ryan claimed, "Right now we have the worse business tax system in the industrialised world".
Steve Mnuchin, US Treasury Secretary, said on CNBC's Squawk Box that the adminstration was "100% committed to getting tax reform done this year."