NEW YORK -- Falling oil prices pushed U.S. stocks down broadly Monday, extending losses into a second week.
European stocks also fell, and the Russian ruble plunged to a record low against the dollar as the continuing collapse in the price of oil reverberated through global financial markets.
The Standard & Poor's 500 fell 12.70 points, or 0.6 percent, to 1,989.63. All 10 industry sectors in the index dropped. The losses followed a 3.5 percent drop in the S&P 500 last week, its biggest decline since May 2012.
The Dow Jones industrial average fell 99.99 points, or 0.6 percent, to 17,180.84. The Nasdaq composite lost 48.44 points, or 1 percent, to 4,605.16.
A brief rally after trading opened in the U.S. vanished as crude oil continued a six-month slide that has lowered its price nearly by half. Global demand for oil has been waning just as supplies are becoming more abundant.
The stock losses in the U.S. were modest, but markets in Germany and France fell more than 2 percent. The Russian ruble plunged, sending stocks sharply lower there, too.
"People are taking profits, and it can go on for a while," said Uri Landesman, president of Platinum Partners, an investment fund in New York. "You're seeing a mini-correction."
A solid report on U.S. manufacturers and some merger news helped jolt markets higher after the open, but the gains evaporated after an hour as crude prices fell. The oil slump is worrying investors because it hammers the profits of drillers and other oil companies that are big components in stock indexes. Investors also fear it may signal the global economic slowdown is deeper than expected.
The ruble sank 13 percent to 65.83 to the dollar. The Russian currency started the year at 32.85 to the dollar. The drop in crude prices has hurt Russia since the country is a major oil exporter and depends heavily on oil for tax revenue.
Several commentators have noted that plunging oil prices could eventually help U.S. stocks because it pushes down gasoline prices, freeing up money for Americans to spend at stores.
Doug Cote, chief market strategist at Voya Investment Management, said investors have overreacted to the oil drop and that he expects stocks to rise.
"Every time the consumer goes to the gas pump, it feels fantastic," he said. For the middle class, "it's like getting a big tax cut."
Investors may get a better sense of just how much oil is helping consumers when the Federal Reserve concludes a two-day meeting Wednesday. The central bank statement summarizing its conclusions from such policy-setting meetings can move markets. Investors will be looking to see if the statement keeps two key words -- "considerable time," a reference to how long the Fed plans to keep short-term interest rates near zero.
Prices for U.S. government bonds fell Monday. The yield on the 10-year Treasury note rose to 2.11 percent from 2.08 percent late Friday.
Benchmark U.S. crude fell $1.90, or 3.3 percent, to close at $55.91 a barrel on the New York Mercantile Exchange. Oil was as high as $107 a barrel in June. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 79 cents to close at $61.06 in London.
Business on 12/16/2014