U.S. Stocks Drop Along With Oil Prices

By Saumya Vaishampayan 

U.S. stocks fell on Tuesday, as a renewed slide in oil prices weighed on energy shares.

The Dow Jones Industrial Average dropped 96 points, or 0.6%, to 17416. The S&P 500 lost eight points, or 0.4%, to 2012, and the Nasdaq Composite Index declined 14 points, or 0.3%, to 4619.

Crude-oil futures slumped 4.7% to $46.84 a barrel, pressuring energy stocks, which fell the most on the S&P 500, down 1.4%. Among shares of oil and gas producers, Denbury Resources Inc. fell 5% and Range Resources Corp. dropped 4.7%.

"The market has taken on a real air of volatility lately," said Michael Antonelli, sales trader at Robert W. Baird. "There's no real conviction...something as simple as crude oil dropping can drop the market."

Johnson & Johnson was among the biggest decliners on the Dow industrials. The company said fourth-quarter sales slipped 0.6%, dented by a stronger U.S. dollar. Shares fell 2.9%, even as per-share earnings, excluding one-time charges, beat expectations.

The U.S. stock market was closed Monday. U.S. stocks rose Friday, with the Dow gaining 1.1% to 17511.57. The S&P rallied 1.3% to 2019.42.

Even with Friday's gains, the major indexes posted weekly losses, their third in a row. Market volatility has increased in recent weeks, with the CBOE Volatility Index ending at 20.95 on Friday, just above its 10-year average of 20 and sharply higher than its 2014 average of 14.2. Intraday swings are likely to continue, with investors watching for fourth-quarter earnings, a policy decision from the European Central Bank and elections in Greece.

Expectations are building for the ECB to unveil a large-scale bond-buying program aimed at reviving Europe's economy. The ECB meets Thursday. French President François Hollande said Monday he expected the ECB to announce it will buy government bonds.

Expectations of quantitative easing boosted European stocks, propelling the Stoxx Europe 600 up 0.8%, close to a seven-year high. Government bonds in many Southern European countries hovered near record highs.

China's Shanghai Composite Index, Hong Kong's Hang Seng Index and Japan's Nikkei Stock Average all advanced Tuesday.

Data showed that China's economic growth slowed to 7.4% in 2014, falling to a level not seen in a quarter century.

In other markets, gold futures added 1.1% to $1290.50 an ounce.

The yield on the 10-year Treasury fell to 1.788% from 1.815% on Friday. Bond yields fall as prices rise.

In other earnings news, Delta Air Lines Inc. said tumbling gas prices boosted its fourth-quarter results, which beat expectations. Shares rose 3.6%, among the biggest gainers on the S&P 500.

Morgan Stanley reported fourth-quarter results that missed analyst estimates. Shares of the bank fell 1.7%.

Write to Saumya Vaishampayan at [e-mail]

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