US close: Energy shares pace the decline as oil prices slide
US stocks declined on Monday, dragged lower by energy issues as oil prices slid.
The Dow Jones Industrial Average closed down 1.3%, while the Nasdaq and the S&P 500 ended 1.6% weaker.
Oil prices tumbled following a rally at the end of last week, after Iraq’s oil ministry said the country had record output in December, while a senior official said it could raise production further this year.
This weighed on oil and gas shares, with Chesapeake Energy skidding nearly 16% and Devon Energy down just over 11%.
Meanwhile, investors were looking ahead to the Federal Reserve’s latest decision on interest rates on Wednesday. The central bank is widely expected to keep rates unchanged at 0.50% following a 25 basis point rise last month, which was the first hike in almost a decade.
The focus will be on the press statement released alongside the rate decision to see whether the Fed hints at the timing of the next rate increase.
"A 13-year low in the price of crude oil has been a dark cloud over markets but the silver lining could be that it forces the Fed to rein in its plans for four rate hikes this year," said Jasper Lawler, market analyst at CMC Markets.
"Alongside falling oil prices, the dollar has risen 2% since the last Fed meeting. A rising dollar slows inflation by reducing the cost of imports and reduces growth by reducing exports. A major risk for the rebound in global markets that began in the middle of last week is that Fed looks past oil, the dollar and market turbulence and keeps a hawkish bias."
In company news, McDonald’s Corp edged higher after reporting fourth quarter sales and profit that beat expectations.
Shares in Tyco International surged after confirmation that it will merge with rival Johnson Controls.
Twitter ended the session sharply lower after chief executive Jack Dorsey confirmed that four high-profile executives will leave the social media giant, with two other executives picking up extra responsibilities.
Caterpillar slumped after Goldman Sachs downgraded the stock to ‘sell’ from ‘neutral’.
The dollar fell 0.2% against the pound, 0.5% against the euro and 0.4% versus the yen.
S&P 500 - Risers
Tyco International Plc (TYC) $34.18 +11.74%
Peabody Energy Corp. (BTU) $3.73 +8.12%
Newmont Mining Corp. (NEM) $17.66 +5.88%
Wynn Resorts Ltd. (WYNN) $61.01 +3.11%
O'Reilly Automotive Inc. (ORLY) $243.93 +1.88%
Mattel Inc. (MAT) $26.73 +1.87%
Edwards Lifesciences Corp. (EW) $80.19 +1.72%
Reynolds American Inc. (RAI) $46.89 +1.27%
Wal-Mart Stores Inc. (WMT) $63.43 +1.18%
Equinix, Inc. (EQIX) $300.00 +0.99%
S&P 500 - Fallers
Chesapeake Energy Corp. (CHK) $2.95 -15.81%
Devon Energy Corp. (DVN) $22.76 -11.18%
International Paper Co. (IP) $32.59 -10.59%
Cimarex Energy Co (XEC) $75.59 -10.41%
Hess Corp. (HES) $34.41 -10.23%
Marathon Oil Corp. (MRO) $8.14 -9.81%
Genworth Financial Inc. (GNW) $2.22 -9.76%
Southwestern Energy Co. (SWN) $7.93 -9.58%
NRG Energy Inc. (NRG) $8.99 -9.47%
ConocoPhillips (COP) $34.22 -9.16%
Dow Jones I.A - Risers
Wal-Mart Stores Inc. (WMT) $63.43 +1.18%
McDonald's Corp. (MCD) $119.26 +0.73%
Coca-Cola Co. (KO) $42.16 +0.24%
Dow Jones I.A - Fallers
Caterpillar Inc. (CAT) $57.93 -5.00%
Goldman Sachs Group Inc. (GS) $151.19 -3.61%
Exxon Mobil Corp. (XOM) $73.97 -3.40%
Chevron Corp. (CVX) $80.86 -3.21%
E.I. du Pont de Nemours and Co. (DD) $53.05 -3.09%
JP Morgan Chase & Co. (JPM) $55.65 -2.28%
Apple Inc. (AAPL) $99.45 -1.94%
United Technologies Corp. (UTX) $84.90 -1.68%
Walt Disney Co. (DIS) $95.31 -1.64%
3M Co. (MMM) $137.62 -1.36%
Nasdaq 100 - Risers
Wynn Resorts Ltd. (WYNN) $61.01 +3.11%
O'Reilly Automotive Inc. (ORLY) $243.93 +1.88%
Mattel Inc. (MAT) $26.73 +1.87%
Electronic Arts Inc. (EA) $69.92 +0.81%
Cognizant Technology Solutions Corp. (CTSH) $60.95 +0.73%
Liberty Global plc Series A (LBTYA) $33.83 +0.39%
Biomarin Pharmaceutical Inc. (BMRN) $84.90 +0.28%
Express Scripts Holding Co (ESRX) $72.31 +0.11%
Yahoo! Inc. (YHOO) $29.78 +0.10%
Avago Technologies Ltd. (AVGO) $124.60 +0.07%
Nasdaq 100 - Fallers
Sandisk Corp. (SNDK) $61.91 -8.17%
Seagate Technology Plc (STX) $26.40 -5.48%
Micron Technology Inc. (MU) $10.47 -5.42%
Whole Foods Market Inc. (WFM) $28.86 -5.13%
Western Digital Corp. (WDC) $42.47 -5.09%
Dish Network Corp. (DISH) $47.04 -4.20%
Mondelez International Inc. (MDLZ) $40.19 -3.39%
Activision Blizzard Inc. (ATVI) $34.72 -3.34%
Symantec Corp. (SYMC) $18.82 -3.34%
Tesla Motors Inc (TSLA) $196.01 -3.23%