Energy Stocks Drop, Following Oil Prices Lower

By DOW JONES Oil and gas stocks started the third quarter lower Thursday as disappointing economic data and crude's fall below $73 a barrel weighed on the sector. The NYSE Arca Natural Gas Index led the sector's decline, falling 1.3% to 475.84 points. Natural-gas company Questar Corp. (STR) boosted shares as much as 5% in morning trading after announcing it completed the spin-off of QEP Resources Inc. as an exploration and production company. QEP is to replace Questar on the S&P 500 Index. Questar was last trading up 4.6% at $15.33 a share. The Philadelphia Oil Service Sector Index fell 0.7% to 162.94 points. The NYSE Arca Oil Index slipped 0.4% to 880.45 points, with BP PLC (BP, BP.LN) holding gains. BP jumped 4.5% to $30.17 in morning trade after a Financial Times story said the oil giant is seeking to raise $5 billion in short-term loans to handle liabilities stemming from the Gulf of Mexico oil spill. Hess Corp. (HES) was down 1.4% to $49.62 after it was downgraded to equal weight from overweight by Morgan Stanley, following the lack of near-term drilling catalysts and uncertainty in the Gulf. August crude-oil futures dropped for a fourth consecutive session Thursday, falling $3.02, or 4%, to $72.61 a barrel on the New York Mercantile Exchange. -MarketWatch; 415-439-6400; AskNewswires@dowjones.com (END) Dow Jones Newswires July 01, 2010 11:09 ET (15:09 GMT)