(Bloomberg) -- Energy again led U.S. stocks lower, with the sector extending its worst two-day rout in two years.
West Texas Intermediate crude futures fell as much as 2.8 percent intraday as the deepening slump in equity and debt markets undermined the outlook for energy demand against the backdrop of swelling U.S. crude production. All of the S&P 500 Energy Index's 32 components traded lower, paced by more than 6 percent declines in Chesapeake Energy Corp. and Hess Corp.
Shares of Exxon Mobil Corp. and Chevron Corp. also extended their slide following disappointing earnings results on Friday, despite Bank of America Merrill Lynch saying before the market opened that their weakness looked overdone. The two juggernauts account for more than 41 percent of the energy index weighting.
“It is pretty clear that there are no buyers willing and ready to step-in on weakness in a group that has underperformed for 12 months and is undervalued on both a relative and absolute basis,” Leo Mariani, an energy specialist at NatAlliance Securities, said in a note to clients Friday.
To contact the reporter on this story: Michael Bellusci in Toronto at mbellusci2@bloomberg.net.
To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Catherine Larkin, Christiana Sciaudone
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