US stocks dip as oil prices fall further
NEW YORK, USA (AFP) — Wall Street stocks closed modestly lower yesterday as worries about sliding crude oil prices overshadowed Alcoa’s strong unofficial start to quarterly earnings season.
The Dow Jones Industrial Average dropped 27.16 points, or 0.15 per cent, to 17,613.68.
The broad-based S&P 500 fell 5.23 (0.26 per cent) to 2,023.03, while the tech-rich Nasdaq Composite Index edged down 3.21 (0.07 per cent) to 4,661.50.
Stocks had surged higher in early trade, but fell into negative territory in the afternoon as traders watched crude oil close at the lowest levels in nearly six years, continuing the steep slide since June when prices were above US$100 a barrel.
US benchmark West Texas Intermediate for February fell 18 cents to settle at US$45.89 a barrel on the New York Mercantile Exchange, its lowest close since March 11, 2009.
In London, Brent crude for February delivery, the international benchmark futures contract, finished at US$46.59 a barrel, down 84 cents.
“Hopes of snapping the market’s recent losing streak were dashed in afternoon action, as the solid early gains that came following some upbeat economic data, as well as yesterday’s stronger-than-expected results from Alcoa, again fell victim to the unrelenting effects of the continued drop in crude oil prices,” said Charles Schwab analysts in a market note.
Alcoa, which reported results after markets closed Monday, tumbled 2.3 per cent, despite earnings that translated into 33 cents per share, well above the 25 cents projected by analysts.
MetLife fell 1.2 per cent after the insurer announced it would challenge in court a US regulatory designation as a “systemically important financial institution” a classification that subjects it to tougher scrutiny.
Homebuilder KB Home plunged 16.3 per cent. The company reported that fourth-quarter revenues jumped 15 per cent to US$2.4 billion but warned that its margins would be squeezed in 2015.
Tech heavyweight Apple rose 0.9 per cent following an upgrade by Credit Suisse, while electronics retailer Best Buy ended flat despite an upgrade from Goldman Sachs.
Bond prices were largely unchanged. The yield on the 10-year US Treasury dipped to 1.90 per cent from 1.91 per cent Monday, while the 30-year stabilised at 2.50 per cent. Bond prices and yields move inversely.
