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GLOBAL MARKETS-Oil's 4 pct tumble weighs on energy shares; banks rally

Published 17/07/2018, 06:22 am
© Reuters.  GLOBAL MARKETS-Oil's 4 pct tumble weighs on energy shares; banks rally
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* Oil prices settle down over 4 percent, Brent hits 3-month low

* Financials up after Bank of America (NYSE:BAC), Deutsche Bank reports

* U.S. bond yields rise as retail sales grow in June

* Dollar retreats ahead of Powell's testimony (Updates with close of U.S. trading)

By Lewis Krauskopf

NEW YORK, July 16 (Reuters) - The price of oil tumbled more than 4 percent on Monday, putting pressure on energy shares and keeping global stock markets in check, although financial shares rallied after upbeat news from Bank of America and Deutsche Bank.

Oil slumped as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers. crude CLcv1 settled down 4.15 percent at $68.06 a barrel, while Brent LCOcv1 settled at 71.84, down 4.63 percent, and touched a three-month low.

Concerns over China's second-quarter economic growth also weighed on oil prices. The country's economy expanded at a slower pace as Beijing's efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low. GDP missing a little bit psychologically was a warning sign that China is doing OK now, but not quite as strong as expected," said Phil Flynn, analyst at Price Futures Group in Chicago.

Wall Street's main indexes ended little changed following strong weeks as investors geared up for a big week of corporate earnings and awaited commentary on the impact of U.S. trade disputes with China and its other trading partners.

"It looks as though we're just taking a bit of a break after a good run last week," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

The Dow Jones Industrial Average .DJI rose 44.95 points, or 0.18 percent, to 25,064.36, the S&P 500 .SPX lost 2.88 points, or 0.10 percent, to 2,798.43 and the Nasdaq Composite .IXIC dropped 20.26 points, or 0.26 percent, to 7,805.72.

Major energy stocks such as Exxon Mobil (NYSE:XOM) XOM.N , Chevron (NYSE:CVX) CVX.N and BP BP.L weighed on key indexes.

Financials in the United States .SPSY and Europe .SX7P were higher following Bank of America's BAC.N better-than-expected quarterly profit and Deutsche Bank's DBKGn.DE upbeat earnings preview. in Europe, the pan-European FTSEurofirst 300 index .FTEU3 lost 0.34 percent.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.13 percent.

Markets looked ahead to Federal Reserve Chairman Jerome Powell's semiannual testimony on the U.S. economy and monetary policy before the U.S. Senate Banking Committee on Tuesday.

The dollar fell after posting its largest weekly gain in a month, as investors pared long bets on the greenback. dollar index .DXY fell 0.28 percent, with the euro EUR= up 0.23 percent to $1.1712.

The rouble held gains after a meeting between Russian President Vladimir Putin and U.S. President Donald Trump helped offset the negative impact from the drop in oil prices. Treasury yields increased, with the two-year yield hitting a near decade peak, as domestic retail sales recorded growth for a fifth straight month in June, supporting the view of solid economic growth in the second quarter. 10-year notes US10YT=RR last fell 7/32 in price to yield 2.8545 percent, from 2.831 percent late on Friday.

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