LONDON: U.S. stocks fell Monday, dragged down by steepening declines in the price of oil.
Monday’s selloff, which accelerated as the day went on, was sparked by ominous signs on the demand side that suggest the global economy may not ramp up enough to absorb all the oil in production. Over the past year, oil prices have tumbled more than 50%, and major stock indexes have often followed the commodity lower. On Monday, crude-oil futures dropped 4.1% to $45.17 a barrel.
The Dow Jones Industrial Average ended down 91.66 points, or 0.5%, to 17598.20. The S&P 500 declined 5.8 points, or 0.3%, to 2098.40 and the Nasdaq Composite shed 12.90 points, or 0.3%, to 5115.38.
Energy companies in the S&P 500 were the biggest decliners in the index, falling 2%. Major oil companies Chevron Corp. and Exxon Mobil Corp., which led declines in the Dow industrials on Friday, continued to drag the market lower, falling 3.3% and 1.5%, respectively.
“It’s the big crude-oil and commodity-based complex that’s dragging the market lower,” said Bill Nichols, head of U.S. equities at Cantor Fitzgerald LP.
Part of the reason for the decline was data showing a gauge of Chinese factory-floor activity slumped to a two-year low. Adding to concerns, in the U.S. the Institute for Supply Management’s manufacturing purchasing managers index declined.
