U.S., European stocks slide as oil prices dive again

Tue Feb 2, 2016 4:26pm EST
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By Lewis Krauskopf

NEW YORK (Reuters) - U.S. and European stock indexes fell sharply on Tuesday and buyers sought safe-haven government bonds after another tumble in depressed oil prices.

Benchmark Brent crude LCOc1 settled down 4.4 percent, while U.S. crude CLc1 fell 5.5 percent, settling below $30 a barrel. Hopes faded for a deal between oil-producing nations to curb a massive supply glut.

The prolonged crude slide was reflected in results from oil majors BP (BP.L: Quote), whose shares slumped after it posted a $6.5 billion loss for 2015, and Exxon Mobil (XOM.N: Quote), which posted its smallest quarterly profit in more than a decade.

The major U.S. stock indexes closed down about 2 percent, led lower by energy shares, while the pan-European FTSEurofirst index .FTEU3 also dropped 2 percent.

Some investors had expressed hope recently that other markets were beginning to diverge from the performance of oil, whose slide has been viewed as a sign of shakiness in the global economy.

"We still haven't broken the correlation between oil and equities and we are yet to find a bottom in oil prices," said Jeff Carbone, co-founder of Cornerstone Financial Partners in Charlotte, North Carolina.

The Dow Jones industrial average .DJI fell 295.64 points, or 1.8 percent, to 16,153.54, the S&P 500 .SPX lost 36.35 points, or 1.87 percent, to 1,903.03 and the Nasdaq Composite .IXIC dropped 103.42 points, or 2.24 percent, to 4,516.95.

"With the backdrop of a pervasive nervous marketplace ... you then have the decline in oil prices, which trips off not just further concern from real-life individuals but also more importantly from the machines which trade based on headlines,” said Michael Holland, chairman of Holland & Co in New York.   Continued...

Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, February 1, 2016.     REUTERS/Staff/Remote