Stocks drop in morning trading as oil price falls again

Chevron (CVX), Exxon Mobil (XOM), Kinder Morgan (KMI) and ConocoPhillips (COP) were sharply lower, while the Energy Select Sector SPDR ETF (XLE) fell 2.6%.

The declining crude prices knocked down shares of major oil companies.

Jetblue Airways was down 3.6 percent at $24.50 after the airline operator said it expected flight sales as measured against capacity to fall in the fourth quarter from a year earlier.

The Dow Jones industrial average fell 162.51 points, or 0.9 percent, to 17,568.

Still, the selling was broad, with nine of the 10 sectors of the Standard and Poor’s 500 index dropping. The Nasdaq Composite Index decreased 111.71 points, or 2.21 percent, to 4,933.47.

THE QUOTE: “We’re stockpiling commodities and demand is not picking up”, said Tim Courtney, chief investment officer of Exencial Wealth Advisors.

Oil prices wavered after a mixed report on Thursday from the Organization of the Petroleum Exporting Countries, which indicated demand for the group’s crude was lower than previous estimates, but which also trimmed 2016 projections for supply from outside the group.

US stocks closed lower on Wednesday in a choppy session as oil resumed its decline, fueling investor worries about global economic growth.

Among other stocks making big moves, Men’s Wearhouse plunged $3.12, or 17 percent, to $15.27 after reporting earnings per share that were half what financial analysts expected, according to FactSet. France’s CAC 40 shed 1.3 percent and Germany’s DAX lost 1.4 percent. The new company is due to split into three parts, one focused on materials, one on agriculture and the third on specialty products. Dow was down 3.2 percent at $53.14. DuPont lost $3.99, or 5 percent, to $70.56. On the Nasdaq, 1,364 issues rose and 877 fell. Instead they will be focusing on communication from Fed officials about the pace of rate rises, which investors now expect to be gradual.

A gauge of US consumer spending rose solidly in November as the holiday shopping season got off to a fairly brisk start.

Meanwhile, traders were looking ahead to the weekend for a number of monthly reports, including retail sales and industrial production.

Investors were also getting into position ahead of an expected hike announcement by the Fed on December 16. Record-low interest rates near 0% have been one of the major fuels for the bull market in stocks, which is now well into its seventh year.

But instead, as fears of a policy error by the Fed grow amid a slowdown in US manufacturing and other concerns, this rate hike turned into a negative event. The latest figures will provide an update on the world’s second biggest economy, which is struggling with a stubborn downturn.

Japan’s benchmark Nikkei 225 index jumped 1 percent to 19,235.30 after the yen failed to hold on to gains from the day before.

Brent futures are down more than 11 percent this month and, having dipped below $40 per barrel, there are renewed expectations it might test 2008’s low.