Stocks fell as crude oil price was down 5%. West Texas Intermediate crude slid below $30 per barrel. WTI fell to as low as $29.82. Analysts concerned that global growth is slowing again.
The continuous slides of oil price leads to the drop of stocks opened lower on Tuesday morning. The energy sector led a 3% slump in the decrease of stocks.
DJIA dropped 200 points. In the energy sector, Exxon Mobil Corp. fell after reporting its biggest earnings slide in more than a decade. As for BP Plc, the company became one of the biggest losers in Europe after its quarterly 91% earnings slump.
The S&P’s 500 Index dropped 1.2 percent at 10:03 a.m. in New York. The Index indicated a weak start in February since 2009. The S&P 500 is now 10 percent from its May record.
China’s slowdown and oil’s slump are roiling global financial markets in 2016. Data from Citigroup Economic Surprise Index indicates that Group of 10 economies are falling short of estimates.
“Rallies right now are short, sharp and don’t last very long,” said by Michael O’Rourke, chief market strategist at JonesTrading Institutional Services LLC, “A lot of last week’s rally was a technical, one-time thing. The Bank of Japan can’t do negative rates every day, and you had a month-end reshuffling that put a strong bid into equities so we’re seeing an unwind. Energy and financials are the worst and Exxon and Deutsche Bank earnings don’t help the situation.”
Meanwhile, the yield of the 10-year treasuries note lowered in the recent nine-month to approximately 1.872%. Yields fall when treasury notes are in demand which results in the rise of their prices.