Jan 5, 2015 12:03 PM
US stocks slump as oil price slides, hurting energy stocks
The Associated Press
NEW YORK (AP) US stocks fell sharply Monday, led by declines in energy stocks as the price of oil plunged again. The euro sank to a nine-year low against the dollar as new doubts surfaced about Greece's future in the common currency bloc.
KEEPING SCORE: The Standard & Poor's 500 index sank 32 points, or 1.5 percent, to 2,026 as of 11:57 a.m. Eastern. The Dow Jones industrial average fell 211 points, or 1.2 percent, to 17,619. The Nasdaq composite dropped 47 points, or 1 percent, to 4,678.
ENERGY: Oil prices extended a slide that began in June last year. Benchmark U.S. crude was down $2.50 at $50.16 a barrel on the New York Mercantile Exchange. The price fell as low as $49.95. The contract dropped 58 cents to $52.69 on Friday. Oil is down from $107 a barrel in June as global demand slackened while supplies remained high.
Energy stocks led declines in the S&P 500, dropping 4 percent. Chevron fell $4.9, or 4.3 percent, to $107.72 and Exxon Mobil dropped $2.90, or 3.1 percent, to $89.92.
EURO JITTERS: The euro was trading at $1.1924 after falling as low as $1.1862, its lowest since December 2005. The drop was triggered by reports that German Chancellor Angela Merkel no longer believes it would be too risky for the 19-member eurozone if Greece dropped out of the currency bloc. Upcoming elections in Greece could be won by the Syriza party which wants to renegotiate the terms of the country's international bailout, threatening its place in the euro group.
The euro has also been under pressure from expectations that the European Central Bank will expand its monetary stimulus as the region's economy struggles.
EUROPEAN STOCKS: France's CAC 40 fell 3.3 percent and Germany's DAX dropped 3 percent. Britain's FTSE 100 shed 2 percent. Greece's ATHEX index plunged 5.6 percent.
THE QUOTE: "The situation with Europe and Greece is causing some caution," said Scott Wren, Senior Global Equity Strategist at the Wells Fargo Investment Institute. "My feeling is that the ECB has band-aided the debt issue and we are going to continue to revisit the issue."
The S&P 500 is down 1.6 percent for the year so far after ending 2014 close to record levels. Despite the sluggish start, Wren still thinks that U.S. stocks will return between 6 and 10 percent for the year.
STOLEN DATA: Morgan Stanley slumped more than other banks after it said that an employee had "misappropriated" data from its wealth management clients. The bank said in a statement that an employee, who has since been fired, posted the account information of 900 clients on the internet. Morgan Stanley's stock dropped $1.28, or 3 percent, to $37.55.
BOND PRICES: In U.S. government bond trading, prices rose. The yield on the benchmark 10-year Treasury note, which falls when prices rise, dropped to 2.05 percent.