Oil service stocks and exchange traded funds (ETFs) slipped Tuesday after recession fears deepened.
Yesterday’s report showing a slowdown in the service sector ignited fears of a definite economic slowdown in the U.S. The Institute for Supply Management reported that the index fell from 54.4 to 41.9 in December. Readings below 50 indicate contraction, reports Wanfeng Zhou for Thomson Financial.
The Oil Service HOLDRs (OIH) ETF fell 2.5%. United States Oil (USO) also lost 1.7%.
Crude oil futures also fell $1.52 to $88.50, down 1.7% on the New York Mercantile Exchange. Oil markets are concerned of a slowdown and a U.S. pullback would weigh on the oil industry. Component parts to the ISM are showing a broad-based deterioration from December.
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