“It has made people worry that somehow the fact that energy is falling is throwing the world into a deflationary spiral,” he said. “That’s the fear that caused volatility.”
Exxon’s Ranking
Energy shares have been closely tied to oil’s ebb and flow. In July 2008, when U.S. crude exceeded $145 a barrel, the group accounted for 16.2 percent of the S&P 500, representing the second-biggest industry after technology.
The steady rise in oil from about $20 a barrel in the 1990s helped companies such as Exxon Mobil Corp. flourish. The Irving, Texas-based energy producer took over General Electric Co. as the most valuable American stock in 2006 and stayed as the No. 1 over the next five years, commanding 5.2 percent of the S&P 500 at the end of 2008, data compiled by Bloomberg show.
After losing $46 billion since June to $403 billion, Exxon’s equity capitalization last week slipped below Microsoft Corp.’s for the first time in a decade, ceding the title of the world’s second-largest company to the software maker.
Energy is the only loser among 10 S&P 500 industries this year, dropping 3.3 percent while other groups have posted gains of at least 3.6 percent. Health-care shares, the biggest winner with a 21 percent rally, have boosted their representation in the benchmark measure to 14 percent, the most since 2009.
“It’s been energy’s pain, but it’s been a gain for a number of sectors and the economy,” Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors Inc., said by phone. His firm oversees $1.8 billion. “Had the same thing happened in financials or any other large sectors, it would have been more damaging.”