Markets: News  

WPX Energy, Cabot fall, energy stocks down

NEW YORK (MarketWatch) -- First Solar Inc. gave back a chunk of gains from the previous session as energy stocks fell on Wednesday, with shares of BP and Williams Cos. drawing the spotlight.

First Solar (FSLR) moved down by 7.4% as the worst performer in the S&P 500 Index. The decline came one day after shares of the solar power specialist rallied more than 20%. On Tuesday, Reuters reported First Solar is increasing production in Germany to meet a rise in demand

Checking the major benchmarks in the energy sector at the closing bell, the NYSE Arca Oil Index (XOI) fell 0.8%, the NYSE Arca Natural Gas Index (XNG) moved down by 1.8% and the Philadelphia Oil Service Index (OSX) lost 2%.

The Energy Select Sector SPDR (XLE) , which includes the 44 energy stocks in the S&P 500, fell 1.3%. Among them, natural gas producer WPX (WPX) dropped 6.3% and Cabot Oil & Gas(COG) declined by 4%. Also losing ground, oil service firm Helmerich & Payne(HP) dropped 4.2% and Pioneer Natural Resources (PXD) stumbled 4.1%.

Among stocks in the spotlight, Williams Cos. (WMB) drew an upgrade to buy from hold at S&P Capital IQ.

"We believe that Williams' strong presence in the Gulf of Mexico and Marcellus shale gives it a competitive advantage," analysts said. "We see its $25 billion of potential capital expenditures over the next five years expanding and diversifying its existing asset base." Shares fell 0.3%.

Chesapeake Energy Corp. (CHK) dropped 3% after the company drew a downgrade to market perform from outperform at Sanford Bernstein.

Analysts said the company is moving to resolve its corporate governance problems, but low natural gas prices continue to pressure the stock.

Chesapeake's second-quarter earnings update in July "is potentially a headwind to the stock" as the company attempts to ramp up oil production to counteract low natural gas prices, analysts said.

Bernstein analysts said they "see value elsewhere" with shares of EOG Resources(EOG) , Noble Energy(NBL) and Apache Corp.(APA) .

BP PLC(BP) said late Wednesday it started up initial production of the Galapagos development in the deepwater U.S. Gulf of Mexico.

The Galapagos development includes three deepwater fields and was hailed by the oil major as one its major projects for the year.

BP owns 56% of Galapagos, with Noble Energy, Inc. (NBL) , Red Willow Offshore, and Houston Energy L.P., listed as co-owners.

BP reiterated plans to spend at least $4 billion a year on oil and gas development in the Gulf of Mexico over the next 10 years. BP shares fell 0.5%.

New York State to restrict fracking

New York State Governor Andrew Cuomo would allow hydraulic fracturing to extract oil and natural gas only in towns that agree to it and would place other restrictions on the practice, according to a report in The New York Times on Wednesday.

Citing unnamed officials, the newspaper reported that drilling would be banned in Catskill Park, aquifers and nationally-designated historic districts.

Fracking would take place in portions of the Marcellus shale in New York counties along the border with Pennsylvania, the report said.

About 100 New York communities have already passed moratoriums on fracking, but a few dozen have approved resolutions in favor of it.