US stocks fall on oil-sector weakness

NEW YORK (AFP) - Weakness in petroleum-linked equities weighed on US stocks Friday following poor earnings from ExxonMobil and Chevron and a drop in oil prices.

The Dow Jones Industrial Average fell 55.52 points (0.31 per cent) to 17,690.46.

The broad-based S&P 500 dropped 4.71 (0.22 per cent) to 2,103.92, while the tech-rich Nasdaq Composite Index slipped 0.50 (0.01 per cent) to 5,128.28.

Dow component ExxonMobil shed 4.6 per cent after reporting net income fell by 52.3 per cent year-over-year to US$4.2 billion (S$5.7 billion) in the second quarter.

Chevron lost 4.9 per cent as it reported about a 90 per cent drop in profits to just US$571 million.

But the pain to petroleum-oriented equities did not end there.

Drilling company Nabors Industries lost 1.7 per cent and producer Marathon Oil shed 3.9 per cent after US oil prices dived almost 3 per cent to close at US$47.52 a barrel.

Analysts also cited a surprisingly weak report on US worker pay.

Wages and salaries rose 0.2 per cent in the second quarter, decelerating from 0.7 per cent growth in the first, the Labour Department said. Analysts noted it was the smallest growth in civilian employment costs on record.

Dow member Merck gained 0.8 per cent after results showed its new Ebola vaccine was effective.

Biotech company Amgen advanced 2.9 per cent after reporting that second-quarter net income rose 6.9 per cent to US$1.7 billion.

Professional networking site LinkedIn plummeted 10.5 per cent after posting strong second-quarter results late Thursday, as analysts said there were signs that the company's growth may be cooling.

Online travel site Expedia bolted 12.9 per cent higher as it reported net income in the second quarter of US$449.6 million, up from US$89.4 million in the year-ago period.

Deutsche Bank said the "strong" results underscored the wisdom of the company's acquisition strategy.

Cybersecurity company FireEye sank 6.9 per cent on news that chief financial officer Michael Sheridan will leave the company to serve in the same role at a company in another sector.

Bond prices advanced. The yield on the 10-year US Treasury tumbled to 2.19 per cent from 2.27 per cent Thursday, while the 30-year fell to 2.91 per cent from 2.95 per cent. Bond prices and yields move inversely.