US open: Stocks slide as oil prices decline, US retail sales fall

US stocks were on the back foot on Tuesday as oil prices slid and data revealed a decline in US retail sales in February.

The Dow Jones Industrial Average was down 0.17%, while the S&P 500 shed 0.54% and the Nasdaq lost 0.60% by 1454 GMT.

Oil prices declined as the Organization of the Petroleum Exporting Countries said that global demand in 2016 for its crude would be less than previously thought and that supply would likely be higher than expected this year.

At 1454 GMT West Texas Intermediate crude dipped 2.11% to $36.41 per barrel and Brent slipped 1.5% to $38.92 per barrel.

US retail sales dropped albeit less than expected in February and January's data was revised down into negative territory, the Commerce Department revealed. Sales fell 0.1% month-on-month to $447.3bn in February, the first drop since September. The decline was not as bad as the 0.2% consensus forecast, however. On an annual basis sales were up 2.9%.

But January's sales data was revised markedly down to a 0.4% fall, having been initially published as a 0.2% rise.

Economists said this added another reason for the Federal Reserve to hold off from raising interest rates. The Fed announces its policy decision on Wednesday and is widely expected to keep measures unchanged.

“A weaker than previously thought retail sales trend so far this year puts further pressure on US policymakers to hold off hiking interest rates," said economist Chris Williamson at Markit.

Earlier the Bank of Japan decided to stand pat on interest rates despite worsening conditions in the world’s third largest economy. The central bank also downgraded its view of the economy and inflation expectations.

“Although it was broadly expected that the central bank remains on standby following the souring mood from the negative interest rate cut on the 29th, the ongoing global woes which have exposed Japan to downside risk have left the central bank under immense pressure to take action,” said FXTM research analyst Lukman Otunuga.

On a positive note for markets, business conditions in the New York region improved more than expected in March, according to a survey from the New York Fed.

The Empire State manufacturing index rose to a reading of 0.6 from -16.6 in February, marking the first positive reading since July last year and beating expectations of -10.

Another report from National Association of Home Builders showed home-builder sentiment held steady in March. An index of builder confidence in the market for new single-family homes remained at the seasonally adjusted level of 58 in March, missing forecasts of 59.

Meanwhile, the ratio of business inventories to sales was 1.40 in January, marginally higher than 1.39 in December and 1.36 it was 12 months ago, the Commerce Department said, signalling that companies are failing to sell what they have produced.

On the corporate front, Valeant Pharmaceuticals shares tumbled after its fourth quarter results missed analysts’ expectations and the company downgraded its revenue forecast for 2016.

Avon Products declined after it announced on Monday that it would cut around 2,500 jobs and move its corporate headquarters to the UK.

In currencies, the dollar was 1.03% firmer versus the pound, 0.08% higher against the euro and 0.76% weaker versus the yen.