Today's Major Market Move - U.S. Based Oil Service Sector Index Declines 8.6% in Today's Session

Stock markets around the world had a rough go of it today with many indexes declining more than 5%. The U.S. market was no exception with the DJIA, S&P 500 and Nasdaq down 4.3%, 4.8% and 5.1% respectively. However the hardest hit of the indexes that we track was the Oil Service Sector Index which finished the day down 8.6%. Oil service company stock prices were getting hit from two directions with both equities and oil getting sold hard.

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Here's a breakdown of the individual components of the index. All of them were down at least 5% with Global Industries (GLBL) getting hit the hardest dropping 12.55%

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As previously mentioned, oil was also down today with Brent declining 5.1% and WTI down 6.2%. Not surprisingly, the Oil Service Sector Index has tracked the price of oil (particularly WTI) reasonably closely this year.

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I'm not so sure about bailing out of oil right now, and I especially wouldn't be shorting it. Many folks are anticipating some action from the Fed in the near future, perhaps QE3 or a cap on certain treasury rates. From the time when QE1 was announced to when QE1 ended WTI Crude prices went from $49 to $87. For the smaller QE2 the oil price from announcement to end was $83 to $97. (sources: Caluclated Risk QE Timeline and US Energy Information Administration).