Global stocks fall as supply worry hits oil; U.S. dollar climbs
By Chuck Mikolajczak
NEW YORK (Reuters) - World stock markets fell on Tuesday as a drop in oil prices weighed on the energy sector, while hawkish comments from several U.S. Federal Reserve officials pushed the U.S. dollar to a one-month high.
After the market close, index provider MSCI said it will add mainland Chinese 'A' stocks to its widely followed Emerging Markets Index in a landmark decision for the global investment landscape.
Oil fell about 2 percent, with Brent settling at seven-month lows and U.S. crude at its cheapest since September, after increased supply from several key producers overshadowed high compliance by OPEC and non-OPEC oil producers with a deal to cut global output.
That slide weighed down energy stocks on Wall Street and in Europe. The S&P energy index dropped 1.3 percent as the worst-performing of the 11 major S&P sectors and Europe's oil and gas sector slumped 2.2 percent.
"People really thought $45 to $55 was kind of the range of oil, but it is getting weaker and weaker and U.S. producers are getting more and more efficient," said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York
"So if that is the case, they are going to keep pumping."
U.S. crude settled down 2.2 percent at $43.23 per barrel and Brent settled 1.9 percent lower at $46.02.
The drop put U.S. crude in a bear market, traditionally defined as a drop of more than 20 percent from a recent high. Continued...