Oil prices slid to their lowest point in nearly seven years yesterday, pulling the S&P energy index’s down to its biggest one-day percentage drop since late August.
The Dow Jones industrial average fell 117.12 points, or 0.66 per cent, to 17,730.51, the S&P 500 lost 14.62 points, or 0.7 per cent, to 2,077.07 and the Nasdaq Composite dropped 40.46 points, or 0.79 per cent, to 5,101.81.
US crude oil futures settled down almost six per cent while Brent crude fell more than 5.3 per cent after Opec’s meeting last week failed to address a growing supply glut.
The S&P energy sector energy index closed down 3.7 per cent after dropping as much as five per cent earlier in the session and oil majors Exxon and Chevron were the biggest drags on the S&P, with almost three per cent declines.
The major US indexes pared losses late in the session. “The fast and frenetic selling of the morning finally got exhausted and it seems like everything got too stretched to the downside,” said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.
Falling oil prices helped airline stocks. JetBlue Airways and Delta Airlines were the biggest winners, with gains of around four per cent.
Investors were also wary after Friday’s November employment report intensified expectations that the economy would be strong enough to absorb an interest rate hike when the Federal Reserve meets next week.
Office Depot fell 15.7 per cent to $5.59 after the US Federal Trade Commission sued to block its merger with Staples, which fell 13.8 per cent to $10.66.