World stock markets lost ground on Tuesday, pressured by a sharp drop in oil prices to their lowest in more than a year, while the U.S. dollar strengthened on hawkish comments from U.S. Federal Reserve officials.
Brent crude touched its lowest level since April 2016 and WTI hit its lowest since February 2016 following news of increases in supply by several key producers. [O/R]
That slide weighed down energy stocks on Wall Street and in Europe. The S&P energy index dropped 1.9 percent as the worst performing of the 11 major S&P sectors and Europe's oil & gas sector slumped 2.1 percent.
"What is amazing about this market is that we have been able to make new all-time highs with energy basically back to what it was doing in 2014 and 2015," said Marc Chaikin, chief executive of Chaikin Analytics in Philadelphia.
The Dow and benchmark S&P 500 had hit fresh records on Monday, buoyed by a rebound in the tech sector.
Chaikin sees the 2,450 level on the S&P 500 as a strong resistance point the market is having difficulty climbing over, "given that earnings season is over and we are just sort of wavering between various stimuli."
The Dow Jones Industrial Average fell 2.1 points, or 0.01 percent, to 21,526.89, the S&P 500 lost 7.26 points, or 0.30 percent, to 2,446.2 and the Nasdaq Composite dropped 13.97 points, or 0.22 percent, to 6,225.05.
The pan-European FTSEurofirst 300 index lost 0.43 percent and MSCI's gauge of stocks across the globe shed 0.44 percent.
U.S. crude fell 2.99 percent to $42.88 per barrel and Brent was last at $45.67, down 2.64 percent.
The U.S. dollar strengthened for a second day as Federal Reserve officials maintained a hawkish tone on hiking interest rates.
On Monday, New York Fed President William Dudley said halting the rate-hiking cycle now would imperil the economy. That was followed by Boston Fed President Eric Rosengren, who said on Tuesday the era of low interest rates in the United States and elsewhere poses financial stability risks.
The dollar index, tracking the unit against other key world currencies, rose 0.31 percent, with the euro down 0.22 percent to $1.1124. The greenback is up nearly 1 percent for the month.
Global stocks decline as oil prices slump; dollar hits 7-month low
June 20, 2017 by Leave a Comment