US open: Stocks decline as oil prices fall, economic data misses forecasts

US stocks were in the red on Wednesday after oil prices declined and US data on services activity and new home sales came in worse than forecast.

The Dow Jones Industrial Average fell 1.37%, the Nasdaq dropped 1.46% and the S&P 500 slid 1.32% at 1507 GMT.

Oil prices fell after Saudi oil minister Ali al-Naimi said a global production cut was not on the cards but more countries would join a deal to freeze output.

West Texas Intermediate crude was sitting 3.4% lower at $30.81 per barrel and Brent crude was down 1.8% at $32.68 per barrel at 1510 GMT.

Adding to the negative sentiment, data showed the US services industry unexpectedly contracted in February. Markit’s purchasing managers index fell to 49.8 in February from 53.2 a month earlier, below estimates for a reading of 53.5 and under the 50 level that separates an expansion from a contraction.

US new home sales plunged 9.2% to a seasonally adjusted rate of 494,000 in January, the Commerce Department revealed. It marked the lowest figure since October and was worse than analysts’ estimates for a 4.4% drop.

The Mortgage Bankers’ Association said mortgage applications fell 4.3% in the week to 19 February.

Meanwhile, Kansas City Federal Reserve President Esther George said the central bank should be prepared to consider raising rates in March despite the recent volatility in global market.

“It absolutely should be on the table” at the next meeting, George told Bloomberg on Tuesday. “At this point I would not say that the data have suggested there has been a fundamental shift in the outlook.”

In company news, JPMorgan’s shares dipped after it said it would set aside another $500 million in provisions for expected losses on energy loans and that revenues were falling at its investment bank.

First Solar jumped after its fourth quarter results beat expectations. The company cut its sales guidance for 2016 and reported a 6.5% drop in sales in its fourth quarter of $942.3m.

The US dollar rose 0.60% against the pound but fell 0.08% against the euro and dropped 0.77% versus the yen.