By: Kate Gibson
January 6, 2015
U.S. stocks dropped sharply on Tuesday, with the S&P 500 falling below 2,000 for the first time in nearly four weeks, as investors fretted the implications of crude’s failure to find a floor.
“Oil hasn’t found a bottom yet, and that’s a concern for investors,” said Paul Nolte, senior vice president, portfolio manager at Kingsview Asset Management.
Crude prices fell further, with U.S. oil down 4 percent and just above $48 a barrel.
“Lower gasoline costs are a boost for consumers, bolstering discretionary spending and income levels. On the negative side, it’s a headwind for companies within and around the energy patch,” Terry Sandven, chief equity strategist for U.S. Bank Wealth Management, said.
The CBOE Volatility Index, a measure of investor uncertainty, jumped 10 percent to 22.05.
AOL rallied after Bloomberg cited people familiar with the matter in reporting Verizon Communications had approached the search engine about a potential deal or joint venture.
The Institute for Supply Management’s non-manufacturing index declined to 56.2 last month from 59.3 in November.
Separate data had factor orders down in November.
Erasing a 79-point gain, the Dow Jones Industrial Average dropped as much as 158 points, and was lately off 141.90 points, or 0.8 percent, at 17,359.75, with JPMorgan Chase pacing losses that included 22 of 30 components.
Dipping beneath 2,000 for the first time since Dec. 17, the S&P 500 was lately off 21.02 points, or 1 percent, to 1,999.67, with energy and industrials hardest hit among its main sectors.
The Nasdaq declined 51.99 points, or 1.1 percent, to 4,600.58.
For every two share rising, two fell on the New York Stock Exchange, where 286 million shares traded as of 11:50 a.m. Eastern. Composite volume neared 1.6 billion.
The U.S. dollar climbed against the currencies of major U.S. trading partners and the 10-year Treasury yield fell 10 basis points to 1.9369 percent.
Oil futures for February delivery dipped $1.84, or 3.7 percent, to $48.20 a barrel; gold futures rose $14.80, or 1.2 percent, to $1,218.80 an ounce on the New York Mercantile Exchange.
On Monday, U.S. stocks fell sharply, with the S&P 500 extending losses into a fourth session, as energy companies took it on the chin as the price of oil fell to its lowest since April 2009.
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