US open: Stocks slide as energy companies slump

US stocks fell on Tuesday after energy companies slumped as oil prices reached a three-year low.

Just before 10:00 in New York the Dow Jones Industrial Average was 14.83 points down to 17,351.41, while the S&P 500 fell 5.70 points to 2,012.11 and the Nasdaq shed 14.04 points to 4,624.87

The Eurozone economy is now expected to expand by just 0.8% and 1.1% in 2014 and 2015, according to the European Commission, compared with its previous forecasts in May of 1.2% and 1.7% respectively.

News from the Eurozone saw already weak oil prices slide even further, with Brent and West Texas intermediate crude falling around 2% to just over $83 and just over $77 a barrel respectively. Saudi Arabia lowered prices for crude exports to US customers ahead of US government data due out on Wednesday which is expected to show that stockpiles rose by 1.9m barrels last week.

Craig Erlam, market analyst at Alpari UK, said it was premature to claim there was a connection between weak stocks and falling oil prices. “Weaker oil prices may be bad for the big oil companies, but when it comes to the global economy, it’s actually a hidden stimulus,” he said.

Meanwhile, the US trade deficit jumped 7.6% in September to the highest level since late spring as exports to Europe, China and Japan all dropped, further proof that the US economy is starting to be affected by slower growth in the economies of key trading partners.

According to data released by the Commerce Department on Tuesday, the trade gap rose to a seasonally adjusted $43bn in September from a slightly revised $40bn in August.

Exports fell 1.5% to $195.6bn, while imports were stable at $238.6bn and the real goods balance widened to a deficit of $50.8bn.

US citizens will go to the polls for the mid-term elections on Tuesday with the race for Senate deemed too close to call, as the Republicans look to secure both chambers of the Congress.

"Political uncertainty might see US markets trade in tight ranges on Tuesday as American voters vote for their representatives, senators and governors for the next two years despite strong momentum from Asia as Japan’s Nikkei 225 hit 17,000 overnight for the first time since 2007 thanks to Japanese government stimulus," said Jasper Lawler, analyst at CMC Markets.

Alibaba said that quarterly revenue jumped 54% in the three months to September, while net profit rose 39%, though that didn't stop shares from sliding slightly early on, while Herbalife plummeted after disappointing third-quarter results.

RetailMeNot sank despite posting strong results, as the firm warned much of its growth was due to “lower monetising mobile visits”, while Sprint Corp fell after results missed estimates.

Apple and Google were largely unchanged after two tech giants announced they had reached a deal with Disney which will allow consumers who buy a Disney movie from either of their online stores to watch on smartphones, tablets and other digital devices even if they run their rival’s operating system.

The dollar was in retreat against the pound, the yen and the euro, while gold futures slid to $1,169.30.

The yield on the 10-year US Treasury note dropped three basis points to 2.32%, while the 30-year note fell by the same margin to 3.03% and the five-year Treasuries shed one basis point to 1.61%.