US stocks fall as oil slumps 6 percent

Associated Press

NEW YORK

U.S. stocks fell Monday as the price of oil slumped again, giving up some of the ground it gained late last week. That forced energy companies lower.

The stock market opened lower and stayed in the red all day. The selling accelerated in the last hour of trading. The biggest losses came in the energy sector and companies that make chemicals and paper goods.

The Dow Jones industrial average fell 208.29 points, or 1.3 percent, to 15,885.22. The Standard & Poor’s 500 index shed 29.82 points, or 1.6 percent, to 1,877.08. The Nasdaq composite index lost 72.69 points, or 1.6 percent, to 4,518.49.

Plunging oil prices have been decimating profits at energy companies and getting investors worried that the global economy is slowing down. Companies that mine metals, especially copper, face the same problem. Low oil prices also are hurting banking stocks because some banks hold large amounts of loans from energy companies, and investors fear they may not get paid back.

The price of benchmark U.S. crude fell $1.85, or 5.7 percent, to $30.34 a barrel in New York. Brent crude, a benchmark for international oils, lost $1.68, or 5.2 percent, to $30.50 a barrel in London. U.S. oil jumped 9 percent Friday after setting 12-year lows earlier in the week.

Exxon Mobil lost $2.59, or 3.4 percent, to $73.98 and Chevron fell $2.65, or 3.2 percent, to $80.89. Chesapeake Energy lost 56 cents, or 16 percent, to $2.95.

Paper and packaging companies fell on concerns about product prices falling. WestRock gave up $5.63, or 14.9 percent, to $32.11 and International Paper declined $3.87, or 10.6 percent, to $32.58.

Mark Wilde, managing director BMO Capital Markets, said stocks in that sector are falling because an influential trade publication estimated that prices for containerboard, an important product, fell sharply in January.

“I think it confirms people’s fears,” Wilde said. “Falling prices are going to mean lower earnings.”

Friday was the best day for the S&P 500 since early December. It was the biggest gain for the Nasdaq composite index since September. That helped stocks make their first weekly gain in the last four.

The shaky global outlook helped push companies to make a slew of big deals last year, and that trend continued as Tyco International and Johnson Controls said they will combine. Tyco makes fire suppression systems and Johnson Controls makes ventilation systems, auto seating and car batteries. Both stocks have struggled as investors worried about their growth.

Tyco jumped $3.56, or 11.6 percent, to $34.15, the biggest gain in the S&P 500. Johnson Controls lost $1.39, or 3.9 percent, to $34.21.