10 August 2011 16:36 [Source: ICIS news]
Correction: In the ICIS news story headlined "N American chem stocks fall as stock market plunges" dated 10 August 2011, please read in the third paragraph …a huge 430-point gain on Tuesday… instead of …a huge 430-point gain on Wednesday…. A corrected story follows.
HOUSTON (ICIS)--North American chemical stocks fell on Wednesday in morning trading as the Dow Jones Industrial Average fell by 426 points, nearly erasing the gains during Tuesday's rally.
The Dow Jones Industrial Average dropped to 10,813.52 as of 10:52 hours New York time (14:52 GMT), down 426.25 points or 3.79%.
The decline followed a huge 430-point gain on Tuesday, during which several chemical stocks outperformed the Dow Jones Industrial Average.
As on the previous day, many chemical stocks followed by ICIS performed better than the Dow Jones Industrial Average, with some stocks actually rising.
Refiner Sunoco was up by 2.15%. Butadiene (BD) producer TPC Group rose by 0.31% and compounder Spartech gained 0.40%.
Among the losers, specialty chemicals producer Solutia fell the most, dropping by 7.52%
For the majors, Dow Chemical was down by 3.44% and DuPont fell by 3.10%.
Industrial gasses producer Praxair fell by 0.77% and fertilizer producer PotashCorp dropped by 3.24%.
The relative optimism in the nation's chemical industry stems in part from the feedstock advantage in the US.
The advent of shale gas has increased the US supply of NGLs, and many chemical companies have announced that they are considering or actually building new crackers. Others announced expansion plans.
Because of the feedstock advantage in the US, the American Chemistry Council (ACC) expects that the nation's industry should continue growing, albeit at a slower pace. The industry could rely on exports to help offset any drop in domestic demand.
However, the ACC is not as optimistic for the overall US economy, placing the chances for another recession at one in three.
Wednesday's drop in the Dow Jones is the fourth trading in five that the index has changed by more than 2%.
On Monday the Dow Jones fell 635 points or 5.55%. Chemical stocks fell much more steeply, with several posting drops of more than 10%.
On Thursday last week, the Dow fell nearly 513 points.
Both days were the worst days for the index since December 2008, when it fell 680 points.
Additional reporting by Bobbie Clark
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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