U.S. stock markets moved lower on Monday, reversing some of the gains made on Friday’s employment-fueled rally. Major benchmarks were weighed down by a declining energy sector hit by tumbling oil and gas prices. The Standard & Poor’s 500 index fell 14.62 points, or 0.7%, to close at 2,077.07. The Dow Jones Industrial Average declined 117.12 points, or 0.66%, to trade at 17,730.51, putting the index into negative territory for the year, as Chevron (N:CVX) and Exxon Mobil (N:XOM) fall more than 2.5% each. The Nasdaq Composite shed 40.46 points, or 0.79%, to close Monday’s trading session at 5,101.81.
Crude oil declined $2.32, or 5.8%, to trade at $37.65 a barrel, putting it at its lowest price since early 2009. Brent oil tumbled 5.28% to settle at $40.73 a barrel, hitting six-year lows. Overall, the energy sector fell more than 4.5%, accounting for most of the declines. Of the companies in the energy sector, gas-related companies, including CONSOL Energy Inc (N:CNX), Williams Cos., ONEOK (N:OKE) and Devon Energy (N:DVN) led the decliners with more than 10% in losses each. These declines followed the steep fall in natural gas prices, which have fallen 5.4% to $2.067, the lowest since late October. Energy prices moved lower after the Organization of the Petroleum Exporting Countries failed to agree on more restrictive production policies that would reduce the market glut.
Asian shares followed, hitting three-week lows on Tuesday on low energy prices and uncertainty over the prospect of a U.S. interest rate hike next week. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.2%, reversing earlier gains. Hong Kong shares led the decliners with a 1.8% tumble. The Japanese Nikkei 225 avoided the downtrend earlier in the session as it rose 0.3%. The index later moved lower after economic data had shown that the country had narrowly averted a recession in the third quarter. China’s pessimistic outlook has been highlighted by a recent poll and November’s import data. Chinese imports had fallen 8.7% when compared to the same month last year, marking the 13th consecutive month of declines. A poll conducted by Reuters had revealed that 79% of Japanese companies do not expect to grow in China next year.
This week’s major economic data releases continue today with the release of UK manufacturing and industrial production. On Wednesday, Chinese inflation and German balance of trade will be released, followed by the Bank of England’s interest rate decision and U.S. jobless claims on Thursday. To end the week, German inflation and U.S. retail sales data will be released on Friday.