US open: Stocks drift lower as slump in oil prices weighs on energy stocks

Shortly before 1500 GMT, the Dow Jones Industrial Average was down 63 points to 17784.20, while the S&P 500 and the Nasdaq were eight and 55 points lower respectively.

On Friday, the Dow Jones surged 370 points, clinching its biggest one-day gain in almost three months, while the S&P advanced 2% on the back of a strong jobs report, which paved the way for the Federal Reserve to hike interest rates for the first time in almost a decade.

“We look set for an environment that will see the US dollar and global stock markets rise, so long as the Federal Reserve delivers on expectations to increase interest rates this month,” said IG’s senior market analyst Chris Beauchamp.

“Markets have already endured one disappointment from a central bank, and a second could seriously damage the general feeling of comfort and acceptance that now appears to accompany marginally tighter monetary policy.”

In company news, Chipotle Mexican Grill slumped 5.99% after the restaurant chain said on Friday that its fourth quarter sales fell in the wake of an E.coli outbreak.

General Electric slid 0.33% after revealing it decided to abandon the sale of its appliance business to Sweden’s Electrolux AB.

Car parts retailer Pep Boys-Manny, Moe & Jack rose 4.78% after activist investor Carl Icahn late Friday disclosed a 12% stake in the company.

Elsewhere, Asian equities began the week on a mixed note, while their European counterparts gained ground.

The dollar was on the front foot against the main currencies, gaining 0.28% against the pound and advancing 0.17% and 0.66% against the yen and the euro respectively, while spot gold fell 0.62% to $1,079.65.

Oil prices tumbled, with West Texas Intermediate falling below $40 a barrel, after losing 3.31% to $38.69 a barrel, while Brent shed 2.50% to $41.95 a barrel.

The economic calendar has very little to offer, with the labour market conditions index for November, scheduled for 1500 GMT, the only data of note.

Investors will also hear from St Louis Fed President James Bullard, who will speak on the US economy and monetary policy at 1730 GMT in Indiana.

Bullard’s speech is expected to be the last by a Fed official ahead of the US central bank meeting over 15-16 December, when the Fed is widely expected to announce the first hike in interest rates in almost ten years.