Why Energy Services Names Like Halliburton Plunged on June 11
Shares of international energy services giant Halliburton (NYSE: HAL) fell as much as 15% in early trading on June 11. Much smaller, but still fairly diversified, energy services player Oil States International (NYSE: OIS) saw its shares drop 26%. And offshore-focused Helix Energy Solutions Group (NYSE: HLX) declined even more, falling as much as 30% at one point. U.S. onshore drilling services provider Patterson-UTI Energy (NASDAQ: PTEN), meanwhile, dropped nearly 15% at the worst point in morning trading. But the pain wasn't limited to this segment of the energy sector, with midstream companies like EnLink Midstream (NYSE: ENLC) also declining, though much less dramatically, with this company hitting a low of around 11%.
All of these companies pared their losses to some degree by lunchtime on Wall Street, but were all still materially lower for the day. The big issue was falling oil prices and a risk-averse attitude that sent the S&P 500 Index into a steep decline at the open. But there's so much more to understand here than just the daily whims of the Mr. Market.
To suggest that the last week or so in the energy sector has been something of a roller-coaster ride wouldn't do the volatility that's taken shape justice. There are signs that investors are bordering on speculation, including massive price changes (up and down) in companies, specifically Chesapeake Energy (NYSE: CHK), that are rumored to be on the verge of bankruptcy (any day now). That stock was up close to 400% at one point over the past five days, and is now up just 30% or so. Today alone the stock has swung from a 20% loss to a 30% gain, with the stock trading with an advance of around 12% at noon Eastern time. Investors normally get wiped out in a bankruptcy, so it's hard to call buying Chesapeake an investment right now.
Source Fool.com
